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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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 Nine Months
Reconciliation to reported net income:
 
2016
 
2015
 
Increase / (Decrease)
 
2016
 
2015
 
Increase / (Decrease)
Reported net income - Consumer Products segment
 
$
102.2

 
$
44.9

 
$
57.3

 
$
268.6

 
$
122.8

 
$
145.8

Interest expense
 
59.9

 
112.9

 
(53.0
)
 
175.8

 
206.5

 
(30.7
)
Income tax expense (benefit)
 
42.5

 
(23.8
)
 
66.3

 
46.9

 
4.8

 
42.1

Depreciation of properties
 
21.8

 
21.6

 
0.2

 
66.2

 
58.7

 
7.5

Amortization of intangibles
 
23.5

 
22.3

 
1.2

 
70.5

 
64.0

 
6.5

      EBITDA - Consumer Products segment
 
249.9

 
177.9

 
72.0

 
628.0

 
456.8

 
171.2

Stock-based compensation
 
15.8

 
16.9

 
(1.1
)
 
47.4

 
36.3

 
11.1

Restructuring and related charges
 
5.4

 
10.5

 
(5.1
)
 
8.2

 
22.3

 
(14.1
)
Acquisition and integration related charges
 
8.0

 
24.2

 
(16.2
)
 
31.2

 
44.2

 
(13.0
)
Purchase accounting inventory adjustment
 
—

 
4.7

 
(4.7
)
 
—

 
7.7

 
(7.7
)
Other
 
0.1

 
2.1

 
(2.0
)
 
1.1

 
3.9

 
(2.8
)
      Adjusted EBITDA - Consumer Products segment
 
$
279.2

 
$
236.3

 
$
42.9

 
$
715.9

 
$
571.2

 
$
144.7

Our Consumer Products segment’s Adjusted EBITDA increased $42.9 million to $279.2 million in the Fiscal 2016 Quarter as compared to $236.3 million in the Fiscal 2015 Quarter, primarily driven by a (i) $35.0 million increase attributable to AAG’s operations, acquired in the Fiscal 2015 third quarter and (ii) $4.6 million increase in Adjusted EBITDA in the home and garden control products line due to higher sales, improved product mix, and cost improvements. Adjusted EBITDA margin represented 20.5% of sales as compared to 18.9% in the Fiscal 2015 Quarter.
Our Consumer Products segment’s Adjusted EBITDA increased $144.7 million to $715.9 million in the Fiscal 2016 Nine Months as compared to $571.2 million in the Fiscal 2015 Nine Months primarily driven by (i) $102.8 million attributable to AAG’s operations; (ii) the improved profitability in the home and garden control products and hardware and home improvement products lines due to the factors discussed above that accounted for $18.3 million of the increase in Adjusted EBIDTA; and (iii) an increase of $15.9 million in the global pet supplies products line primarily driven by the acquisition of Salix and European IAMS and Eukanuba. Adjusted EBITDA margin represented 18.9% of sales as compared to 16.9% in the Fiscal 2015 Nine Months.
Organic Net Sales — Consumer Products
See Consumer Products Segment in the respective section above for discussion on the changes in organic net sales. Below is a reconciliation of reported net sales to organic net sales, by product line for the Fiscal 2016 Quarter and Fiscal 2016 Nine Months compared to net sales for the Fiscal 2015 Quarter and Fiscal 2015 Nine Months, respectively:
Three months ended June 30, 2016
 
Net Sales
 
Effect of changes in Currency
 
Net Sales Excluding Effect of Changes in Currency
 
Effect of Acquisitions
 
Organic Net Sales
 
Net Sales June 30, 2015
 
$ Variance
 
% Variance
Hardware and home improvement products
 
$
328.6

 
$
3.3

 
$
331.9

 
$
—

 
$
331.9

 
$
313.5

 
$
18.4

 
5.9
 %
Home and garden control products
 
212.0

 
—

 
212.0

 
—

 
212.0

 
202.3

 
9.7

 
4.8
 %
Global pet supplies
 
207.1

 
(0.7
)
 
206.4

 
—

 
206.4

 
208.4

 
(2.0
)
 
(1.0
)%
Consumer batteries
 
187.2

 
3.9

 
191.1

 
—

 
191.1

 
178.3

 
12.8

 
7.2
 %
Global auto care
 
159.8

 
0.4

 
160.2

 
(84.1
)
 
76.1

 
64.4

 
11.7

 
18.2
 %
Small appliances
 
151.1

 
5.8

 
156.9

 
—

 
156.9

 
161.3

 
(4.4
)
 
(2.7
)%
Personal care products
 
115.8

 
3.1

 
118.9

 
—

 
118.9

 
119.3

 
(0.4
)
 
(0.3
)%
Total
 
$
1,361.6

 
$
15.8

 
$
1,377.4

 
$
(84.1
)
 
$
1,293.3

 
$
1,247.5

 
$
45.8

 
3.7
 %

58
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