Harbinger Group Inc.
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SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 08/09/2016
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Selling, acquisition, operating and general expenses. Selling, acquisition, operating and general expenses for the Fiscal 2016 Quarter decreased $8.0 million to $3.8 million from $11.8 million in the Fiscal 2015 Quarter and decreased $16.2 million to $14.6 million from $30.8 million in the Fiscal 2016 Nine Months. The decreases in Selling, acquisition, operating and general expenses reflect the continued run-off of the Salus portfolio, coupled with the effect of the wind-down of the operations of certain subsidiaries in the Asset Management segment.
Impairments and bad debt expense. Impairments and bad debt expense for the Fiscal 2016 Quarter decreased $10.5 million to a benefit of $0.9 million from $9.6 million in the Fiscal 2015 Quarter. The decrease was primarily due to the reversal of bad debt expenses associated with higher than expected recovery rate from the partial repayment on the loan to RadioShack of $16.7 million, partially offset by goodwill impairment of $10.7 million at CorAmerica.
Impairment and bad debt expense for the Fiscal 2016 Nine Months decreased $58.0 million to $14.2 million from $72.2 million for the Fiscal 2015 Nine Months driven by the impairment of a loan to RadioShack that was recorded in the Fiscal 2015 Nine Months, as well as the factors described in the quarterly variance above.

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):
 
Fiscal Quarter
 
Fiscal Nine Months
 
2016
 
2015
 
Increase / (Decrease)
 
2016
 
2015
 
Increase / (Decrease)
Net consumer and other product sales
$
—

 
$
2.2

 
$
(2.2
)
 
$
—

 
$
42.7

 
$
(42.7
)
Cost of consumer products and other goods sold
—

 
1.8

 
(1.8
)
 
—

 
30.9

 
(30.9
)
Corporate and Other gross profit
—

 
0.4

 
(0.4
)
 
—

 
11.8

 
(11.8
)
Selling, acquisition, operating and general expenses
17.0

 
41.5

 
(24.5
)
 
39.8

 
141.0

 
(101.2
)
Impairments of goodwill and intangibles
—

 
—

 
—

 
—

 
60.2

 
(60.2
)
Operating loss - Corporate and Other segment
$
(17.0
)
 
$
(41.1
)
 
$
24.1

 
$
(39.8
)
 
$
(189.4
)
 
$
149.6

Net consumer and other product sales. Net consumer and other product sales for the Fiscal 2015 Quarter and Fiscal 2015 Nine Months represents sales from FOH. FOH was deconsolidated in the third quarter of fiscal 2015 following FOHG’s declaration of bankruptcy in April 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 Nine Months represents FOH sales less cost of consumer products and other goods sold for the Fiscal 2015 Nine Months.
Selling, acquisition, operating and general expenses. Selling, acquisition, operating and general expenses decreased $24.5 million to $17.0 million for the Fiscal 2016 Quarter from $41.5 million for the Fiscal 2015 Quarter. The $24.5 million decrease in corporate expenses for the Fiscal 2016 Quarter when compared to the Fiscal 2015 Quarter was primarily due to $21.4 million of selling, operating and general expenses associated with FOH during the Fiscal 2015 Quarter, as well as lower bonus and stock based compensation expenses for the Fiscal 2016 Quarter when compared to the Fiscal 2015 Quarter.
Selling, acquisition, operating and general expenses decreased $101.2 million to $39.8 million for the Fiscal 2016 Nine Months from $141.0 million for the Fiscal 2015 Nine Months. The $101.2 million decrease in corporate expenses for the Fiscal 2016 Nine Months when compared to the Fiscal 2015 Nine Months was primarily due to $39.8 million of selling, operating and general expenses associated with FOH during the Fiscal 2015 Nine Months; $33.2 million of severance costs associated with the departure of the Company’s former Chief Executive Officer (“CEO”); as well as lower bonus and stock based compensation, acquisition and integration costs, and legal expenses for the Fiscal 2016 Nine Months when compared to the Fiscal 2015 Nine Months.
Impairments of goodwill and intangibles. Impairments of goodwill and intangibles of $60.2 million were recognized in the Fiscal 2015 Nine 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.


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