Harbinger Group Inc.
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SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 02/07/2017
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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.
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
Reconciliation to reported net income:
 
2017
 
2016
 
Increase / (Decrease)
Reported net income - Consumer Products segment
 
$
65.2

 
$
73.7

 
$
(8.5
)
Interest expense
 
55.8

 
58.4

 
(2.6
)
Income tax expense
 
31.1

 
6.9

 
24.2

Depreciation of properties
 
22.4

 
23.0

 
(0.6
)
Amortization of intangibles
 
23.6

 
23.6

 
—

      EBITDA - Consumer Products segment
 
198.1

 
185.6

 
12.5

Stock-based compensation
 
8.8

 
10.1

 
(1.3
)
Acquisition and integration related charges
 
4.1

 
9.9

 
(9.9
)
Restructuring and related charges
 
3.2

 
1.2

 
2.0

Other
 
—

 
0.3

 
(0.3
)
      Adjusted EBITDA - Consumer Products segment
 
$
214.2

 
$
207.1

 
$
7.1

Our Consumer Products segment’s Adjusted EBITDA increased $7.1 million to $214.2 million in the Fiscal 2017 Quarter as compared to $207.1 million in the Fiscal 2016 Quarter primarily driven by $5.5 million improvements in the hardware and home improvement product line due to increase in net sales, cost improvements and product mix. Adjusted EBITDA margin represented 17.7% of sales in the Fiscal 2017 Quarter as compared to 17.0% in the Fiscal 2016 Quarter.
Organic Net Sales — Consumer Products
Our Consumer Products segment results contain financial information regarding organic net sales, which is defined as net sales excluding the effect of changes in foreign currency exchange rates and/or impact from acquisitions (when applicable). We believe this non-GAAP measure provides useful information to investors because it reflects regional and operating performance from our Consumer Products segment’s activities without the effect of changes in currency exchange rate and/or acquisitions. The Consumer Products segment uses organic net sales as one measure to monitor and evaluate their regional and segment performance. Organic growth is calculated by comparing organic net sales to net sales in the prior period. The effect of changes in currency exchange rates is determined by translating the period’s net sales using the currency exchange rates that were in effect during the prior comparative period. Net sales are attributed to the geographic regions based on the country of destination. Spectrum Brands excludes net sales from acquired businesses in the current period for which there are no comparable sales in the prior period.
The following is a reconciliation of reported net sales to organic net sales for the Fiscal 2017 Quarter compared to net sales for the Fiscal 2016 Quarter:
 
 
Net Sales
 
Effect of Changes in Currency
 
Organic Net Sales
 
Net Sales Fiscal 2016 Quarter
 
Variance
 
% Variance
Hardware and home improvement products
 
$
288.8

 
$
0.2

 
$
289.0

 
$
282.7

 
$
6.3

 
2.2
 %
Consumer batteries
 
260.5

 
4.5

 
265.0

 
252.6

 
12.4

 
4.9
 %
Global pet supplies
 
194.2

 
2.8

 
197.0

 
203.4

 
(6.4
)
 
(3.1
)%
Small appliances
 
186.4

 
7.5

 
193.9

 
189.9

 
4.0

 
2.1
 %
Personal care products
 
162.6

 
3.7

 
166.3

 
168.8

 
(2.5
)
 
(1.5
)%
Global auto care
 
69.5

 
0.1

 
69.6

 
73.7

 
(4.1
)
 
(5.6
)%
Home and garden control products
 
49.8

 
—

 
49.8

 
47.7

 
2.1

 
4.4
 %
Total
 
$
1,211.8

 
$
18.8

 
$
1,230.6

 
$
1,218.8

 
$
11.8

 
1.0
 %

43
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