Spectrum’s Q3 Net Loss Widens

Spectrum Brands Holdings Inc., a Madison, Wis.-based manufacturer of pet supplies, lawn care products and consumer goods, reported today a net loss of $86.5 million on net sales of $653.5 million for the third quarter ended July 4, compared to a net loss of $36.5 million on net sales of $589.4 million in the year-ago period.

Earnings were hurt by $99 million in expenses related to the Russell Hobbs acquisition, which closed June 16. As part of the deal, Russell Hobbs' LitterMaid brand has joined Spectrum's United Pet Group business unit, which includes Tetra, Marineland and 8-in-1 branded pet products.

The company attributed the 10.9 percent quarterly sales growth to added sales from Russell Hobbs, a strong home and garden season and a double-digit increase in shaving and grooming sales.

Following an early pond season that materialized during the fiscal second quarter and a generally soft pet category due to macroeconomic factors, the global pet supplies segment reported a profit of $17.2 million on net sales of $135.2 million for the third quarter, compared to a profit of $19.2 million on net sales of $144.6 million for the same period last year.

With a "very successful 2010 season highlighted by robust promotional activity and solid distribution gains," the home and garden business segment reported a profit of $40.1 million on net sales of $163.6 million for the quarter, compared to a profit of $38.7 million on net sales of $148 million in the year-ago period.

For the first nine months, Spectrum reported an overall net loss of $165.8 million on net sales of $1.8 billion, compared to a net loss of $209.6 million on net sales of $1.6 billion in the year-ago period.

The global pet supplies segment reported a profit of $37.3 million on net sales of $420.4 million for the first nine months, compared to a profit of $45.8 million on net sales of $419.1 million.
The home and garden segment reported a profit of $41.5 million on net sales of $266 million for the first nine months, compared to a profit of $36.9 million on net sales of $248.4 million.

Spectrum, which recently moved its headquarters back to Madison from Atlanta, continues to expect fiscal 2010 net sales growth of 3 to 5 percent over fiscal 2009.