Spectrum Brands Sees Sales Slip in 2009

In announcing fourth quarter and full year results, chief executive officer Kent Hussey called 2009 a “watershed year” for Spectrum Brands Inc., the Atlanta-based maker of Cutter and Repel insect repellents and Hot Shot insecticides.

The firm, which also produces Remington hair styling tools, Rayovac batteries and pet supplies, emerged from bankruptcy on Aug. 28.

Spectrum’s consolidated net sales were $589.4 million and $2.2 billion for the fourth quarter and full year fiscal 2009, respectively, compared to $668 million and $2.4 billion for the same periods, respectively, in fiscal 2008. In addition to timing differences for the fourth quarter, results were impacted by inventory de-stocking and internal SKU rationalization initiatives as well as unfavorable foreign exchange rates, the company said.

Net sales in the home and garden segment—which includes the Cutter brand—were $73.2 million for the fourth quarter and $321.6 million for the full year, compared with $85 million and $334.1 million for the same periods of 2008, respectively. Spectrum said that although these products held their share positions in their respective categories, the decrease in revenues was driven primarily by the business unit’s decision to decrease its SKUs by 30% during the year in order to reduce costs and improve efficiencies, as well as tighter inventory controls at retailers.

According to Hussey, during 2009, the company “successfully completed a major financial restructuring” in which it eliminated more than $800 million of debt and “emerged a stronger competitor and a financially healthier business. Additionally, despite the tough economy, our product lines, many of which benefited from our value positioning, continued to perform very well and delivered improved adjusted EBITDA over fiscal 2008.”