Harbinger Group Inc.
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SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 05/05/2017
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compensation expense as it is a non-cash based compensation cost, see Note 10, Stock-Based Compensation, to our Condensed Consolidated Financial Statements included in Part I - Item 1. Financial Statements for further details; (2) acquisition and integration charges 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 charges, which consist of project costs associated with restructuring initiatives; (4) non-cash purchase accounting inventory adjustments recognized in earnings subsequent to an acquisition (when applicable); (5) non-cash asset impairments or write-offs realized (when applicable); and (6) other adjustments as further discussed. During the Fiscal 2017 Quarter and Fiscal 2017 Six Months, other adjustments consisted of professional fees associated with non-acquisition based strategic initiatives of our Consumer Products segment. During the Fiscal 2016 Quarter and Fiscal 2016 Six Months, other adjustments consisted of costs associated with the exiting of a key executive, coupled with onboarding a key executive.
The table below shows a reconciliation of net income to Adjusted EBITDA for the Consumer Products segment (in millions):
 
 
Fiscal Quarter
 
Fiscal Six Months
Reconciliation to reported net income:
 
2017
 
2016
 
Increase / (Decrease)
 
2017
 
2016
 
Increase / (Decrease)
Reported net income - Consumer Products segment
 
$
58.7

 
$
92.7

 
$
(34.0
)
 
$
123.9

 
$
166.4

 
$
(42.5
)
Interest expense
 
50.6

 
57.5

 
(6.9
)
 
106.4

 
115.9

 
(9.5
)
Income tax expense (benefit)
 
33.0

 
(2.5
)
 
35.5

 
64.1

 
4.4

 
59.7

Depreciation of properties
 
24.2

 
21.4

 
2.8

 
46.6

 
44.4

 
2.2

Amortization of intangibles
 
23.5

 
23.4

 
0.1

 
47.1

 
47.0

 
0.1

      EBITDA - Consumer Products segment
 
190.0

 
192.5

 
(2.5
)
 
388.1

 
378.1

 
10.0

Stock-based compensation
 
14.2

 
21.5

 
(7.3
)
 
23.0

 
31.6

 
(8.6
)
Acquisition and integration related charges
 
5.1

 
13.3

 
(8.2
)
 
9.2

 
23.2

 
(14.0
)
Restructuring and related charges
 
8.3

 
1.6

 
6.7

 
11.5

 
2.8

 
8.7

Other
 
2.6

 
0.7

 
1.9

 
2.6

 
1.0

 
1.6

      Adjusted EBITDA - Consumer Products segment
 
$
220.2

 
$
229.6

 
$
(9.4
)
 
$
434.4

 
$
436.7

 
$
(2.3
)
Our Consumer Products segment’s Adjusted EBITDA decreased $9.4 million to $220.2 million in the Fiscal 2017 Quarter as compared to $229.6 million in the Fiscal 2016 Quarter primarily driven by a $8.6 million decrease in the home and garden product categories due to lower sales volumes, incremental marketing costs for new product launches and channel expansion. Adjusted EBITDA margin represented 18.8% of sales in the Fiscal 2017 Quarter as compared to 19.0% in the Fiscal 2016 Quarter.
Our Consumer Products segment’s Adjusted EBITDA decreased $2.3 million to $434.4 million in the Fiscal 2017 Six Months as compared to $436.7 million in the Fiscal 2016 Six Months primarily driven by a decrease of $10.0 million in the home and garden product categories due to the reasons described above, which was partially offset by an increase of $8.5 million in the hardware and home improvement product categories due to increase in sales volumes with cost improvements. Adjusted EBITDA margin represented 18.2% of sales in the Fiscal 2017 Six Months as compared to 18.0% in the Fiscal 2016 Six Months.


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