SEC Filings
 |
| 10-K | |
| HRG GROUP, INC. filed this Form 10-K on 11/23/2016 | |
| Entire Document | |
| << Previous Page | Next Page >> | |
Corporate Selling, acquisition, operating and general expenses decreased $51.7 million to $52.2 million for Fiscal 2016 from $103.9 million for Fiscal 2015. The decrease was primarily due to the absence in Fiscal 2016 of $34.1 million of severance costs associated with the 2014 CEO Departure and other HRG employee departures; a decrease of $5.2 million in bonus and stock based compensation; and a decrease in overall overhead cost for Fiscal 2016 when compared to Fiscal 2015. The lower compensation expense was driven by fewer participants in HRG’s bonus pool, which was partially offset by higher performance-based bonuses for the remaining participants. Selling, acquisition, operating and general expenses decreased $12.5 million to $103.9 million for Fiscal 2015 from $116.4 million for Fiscal 2014. The decrease was primarily due to (i) a decrease in bonus expense of $31.7 million; (ii) the non-recurrence of a $6.1 million contingency reserve recorded in Fiscal 2014; (iii) a $2.9 million decrease in acquisition and integrations costs; and (iv) a $2.8 million reimbursement of legal fees as part of the settlement with OMGUK; partially offset by the severance costs associated with the 2014 CEO Departure and other HRG employee departures of $34.1 million. HRG’s Compensation Committee established annual salary, cash and equity-based bonus arrangements for certain of HRG’s corporate employees. In determining the bonus arrangements for HRG employees, HRG has considered the change in the value of its net asset value in accordance with the criteria established by HRG’s Compensation Committee (“Compensation NAV”). In Fiscal 2016, underlying performance of the Compensation NAV increased 24.8% as compared to a decline of 3.8% in Fiscal 2015 and an increase of 41.5% in Fiscal 2014. Asset Management Selling, acquisition, operating and general expenses decreased $20.2 million to $17.2 million for Fiscal 2016 from $37.4 million for Fiscal 2015. The decrease in selling, acquisition, operating and general expenses reflect the continued run-off of the Salus portfolio, coupled with the effect of the Company’s sale of its ownership interest in CorAmerica and the wind-down of the operations of EIC. Selling, acquisition, operating and general expenses increased $6.2 million to $37.4 million for Fiscal 2015 from $31.2 million for Fiscal 2014, primarily due to increased legal and consulting fees. Women’s apparel and related products Selling, acquisition, operating and general expenses increased $24.4 million to $39.8 million for Fiscal 2015 from $15.4 million in Fiscal 2014 primarily due to costs related to the bankruptcy filing of FOHG, FOH and their subsidiaries during Fiscal 2015. Impairments and bad debt expense. Impairments and bad debt expense for Fiscal 2016 were $23.5 million due to $12.8 million net increase to the provision for credit losses on Salus’ asset-based loan portfolio and goodwill impairment of $10.7 million at CorAmerica. Impairments and bad debt expense for Fiscal 2015 were $148.1 million primarily due to impairments of $60.2 million to goodwill and intangible assets due to a change in view of the strategic direction of FOH following the 2014 CEO Departure during the first quarter of Fiscal 2015, which triggered goodwill and intangibles impairment tests. In addition, the Company recognized $51.1 million charge-off on the loan to RadioShack, a former borrower of Salus, as well as an increase in the provision for credit losses of $19.2 million related to the RadioShack loan and $23.2 million related to other loans. Non-GAAP Measurements Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) is a non-GAAP financial measure used in our Consumer Products segment and one of the measures used for determining Spectrum Brands’ debt covenant compliance. We believe that certain financial measures that are not prescribed by generally accepted accounting principles (“GAAP”) provides useful information to investors because it reflects ongoing operating performance and trends, excluding certain non-cash based expenses and/or non-recurring items during each of the comparable periods 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. EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes: (1) stock based compensation expense as it is a non-cash based compensation cost; (2) acquisition and integration costs that consist of transaction costs from acquisition transactions during the period or subsequent integration related project costs directly associated with the acquired business; (3) restructuring and related costs, which consist of project costs associated with restructuring initiatives; (4) non-cash purchase accounting inventory adjustments recognized in earnings subsequent to an acquisition; (5) non-cash asset impairments or write-offs realized; (6) and other adjustments. During Fiscal 2016, other adjustments consisted of costs associated with the onboarding of a key executive and the involuntary transfer of inventory. During Fiscal 2015, other adjustments consisted of costs associated with the exiting of a key executive, coupled with onboarding a key executive, plus the Company recognized a non-recurring adjustment for the devaluation of cash and cash equivalents denominated in Venezuelan currency. 92 | |
| << Previous Page | Next Page >> | |