SEC Filings

424B3
SPECTRUM BRANDS, INC. filed this Form 424B3 on 08/03/2016
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Table of Contents

Net cash provided by financing activities

Net cash used by financing activities of $173.3 million for the nine month period ended July 3, 2016 consisted of (i) $198.5 million net proceeds from the Revolver Facility and $5.4 million from other debt financing; (ii) $13.9 million net proceeds from an intercompany loan; (iii) $311.7 million of payments on debt; (iv) payment of debt issuance costs of $1.6 million; (v) cash dividends to parent of $74.6 million and (vi) payment of contingent consideration associated with acquisitions in prior periods of $3.2 million.

Net cash provided by financing activities of $1,333.2 million for the nine month period ended June 28, 2015 consisted of (i) proceeds related to the issuance of debt of $1,444.8 USD Term Loan, $60.9 million CAD Term Loan, $340.2 million Euro Term Loan, $250.0 million of 6.375% unsecured notes, $1,000 million of 5.75% unsecured notes, $185.4 million of Euro Term Loan Tranche B, and $47.5 million of other debt financing; (ii) $38.9 net proceeds from an intercompany loan; (iii) $2,472.6 million of payments on debt; (vi) payment of debt issuance costs of $37.3 million; (v) capital contributions of $528.3 million from parent; (vi) cash dividends to parent of $51.0 million; and (vii) a use to pay share-based tax withholdings of employees for vested stock awards of $1.9 million, net of proceeds upon vesting.

Capital Expenditures

Capital expenditures for the Company totaled $59.6 million and $49.5 million for the nine month periods ended July 3, 2016, and June 28, 2015, respectively. We expect to make investments in capital projects similar to historical levels, as well as incremental investments in high return innovation and cost reduction projects slightly above historical levels.

Depreciation and Amortization

Depreciation and amortization for the Company totaled $136.7 million and $122.7 million for the nine months ended July 3, 2016, and June 28, 2015, respectively. The increase in depreciation and amortization of $14.0 million for the nine month period ended July 3, 2016 was due to the recognition of property, plant and equipment and definite lived intangible assets from the AAG, European IAMS and Eukanuba, and Salix acquisitions during the fiscal year ended September 30, 2015.

Indebtedness

Refer to Note 9 to the Condensed Consolidated Financial Statements, “Debt”, included elsewhere in this Quarterly Report for additional information. At July 3, 2016, we were in compliance with all covenants under the Senior Credit Agreement, the indenture governing both the 6.375% Notes and the 6.625% Notes, the indenture governing the 6.125% Notes, and the indenture governing the 5.75% Notes.

Credit Ratings

The Company’s access to the capital markets and financing costs may depend on the credit ratings of the Company when it is accessing the capital markets. None of the Company’s current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company’s credit ratings could increase fees and interest charges on future borrowings.

Equity

During the nine month period ended July 3, 2016, SBH granted 0.6 million restricted stock units to our employees and our directors. All vesting dates are subject to the recipient’s continued employment, except as otherwise permitted by our Compensation Committee or Board of Directors or in certain cases if the employee is terminated without cause or as otherwise provided in an applicable employment agreement. The total market value of the RSUs on the date of grant was $55.7 million, which represented unearned share based compensation. Such unearned compensation is amortized to expense over the appropriate vesting period. See Note 13, “Share Based Compensation” of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

From time to time we may repurchase outstanding shares of SBH common stock in the open market or otherwise. On July 28, 2015, the Board of Directors approved a $300 million common stock repurchase program. The authorization is effective for 36 months. During the nine month period ended July 3, 2016, SBH repurchased 0.4 million shares.

 

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