Spectrum Brands Inc. (Atlanta, GA), formerly known as Rayovac Corp. (Madison, WI), reported a fiscal 2005 fourth-quarter diluted net loss per share of $0.06 and pro-forma diluted earnings per share of $0.13. The results compare to diluted earnings per share of $0.52 and pro-forma diluted earnings per share of $0.60 for the comparable prior-year period. Fourth-quarter net sales were $603.7 million, as compared to $377.0 million for the same period last year.
Gross profit for the quarter was $219.3 million versus $155.5 million for the same period last year. Cost of goods sold during the quarter included $2.7 million in restructuring and related costs incurred in connection with the closing of a zinc carbon manufacturing facility in Breitenbach, France, and $2.6 million in inventory valuation charges associated with acquisitions. Gross profit for the fourth quarter was $224.6 million, representing a gross margin of 37.2 percent versus 41.4 percent for the same period last year. The decline in gross margin percentage resulted from costs associated with the transition of the company's battery marketing strategy in North America, the inclusion of the lower margin United business, and increased raw material, fuel and transportation costs.
Operating income was $34.1 million versus fiscal 2004's fourth-quarter operating income of $46.5 million. Operating expenses in 2005 included restructuring and related charges of $8.3 million primarily related to the integration of United. In 2004, operating expenses included $4.5 million in restructuring and related charges associated with the Remington acquisition. Pro-forma operating income for the fourth quarter was $47.7 million, or 7.9 percent of sales, compared to $51.4 million, or 13.6 percent of sales last year.
"We delivered results in line with revised expectations despite facing a number of challenges during the fourth quarter," said Spectrum Brands Chairman and CEO Dave Jones. "We were pleased to see strong sales growth in certain parts of our business. However, these positive results were more than offset by declines in battery sales in North America and Europe. However, given the recent challenges in our battery business, concerns about consumer spending trends, and our expectations for continuing cost pressures we believe it prudent to revise our guidance for fiscal 2006 pro-forma earnings to a range of $2.10 to $2.20."
