Exhibit
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HRG Group, Inc. Reports Second Quarter Results Achieves Consolidated Revenue Growth of 11.0% Over the Second Quarter of 2015 |
NEW YORK - May 9, 2016 -- HRG Group, Inc. (“HRG” or the “Company”; NYSE: HRG), a diversified holding company focused on owning businesses that it believes can, in the long term, generate sustainable free cash flow or attractive returns on investment, today announced its consolidated results for the second quarter of Fiscal 2016 ended on March 31, 2016 (the “Fiscal 2016 Quarter”). The results include HRG's four segments:
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• | Consumer Products, which consists of Spectrum Brands Holdings, Inc. and its subsidiaries (“Spectrum Brands”; NYSE: SPB); |
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• | Insurance, which consists of Front Street Re (Delaware) Ltd. and its subsidiaries (“Front Street”); |
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• | Energy, which consists of Compass Production Partners, LP and its subsidiaries (“Compass”); and |
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• | Asset Management, which consists of Salus Capital Partners, LLC (“Salus”), Energy & Infrastructure Capital, LLC (“EIC”) and CorAmerica Capital, LLC (“CorAmerica”). |
“We are pleased to report another solid quarter at HRG, highlighted by strong growth on our topline as
well as a substantial increase in consolidated operating income, which has increased in the first half of the year by more than half a billion dollars as compared to the first half of Fiscal 2015,” said Omar Asali, President and Chief Executive Officer of HRG.
“Spectrum Brands delivered yet another excellent quarter, achieving organic sales growth of 4.9% and higher Adjusted EBITDA, on a currency-consistent basis, from each of its major product categories, and we continue to anticipate record levels of annual revenue, Adjusted EBITDA and free cash flow from Spectrum in Fiscal 2016,” continued Asali. "In the Energy segment, we continue to maintain a focus on the leverage and liquidity profile at Compass, while in Asset Management, we have achieved a significant reduction in that segment's general and administrative costs as the wind down of Salus moves closer to completion.
“Elsewhere this quarter, FGL moved closer to completing its transaction with Anbang and received clearance from the Committee on Foreign Investment in the United States. FGL continues to make progress securing the remaining regulatory approvals and we expect FGL to close this transaction in the third quarter of calendar year 2016. We remain committed to using a portion of the proceeds from the FGL transaction to meaningfully delever at HRG Group and will consider other strategies that maximize shareholder value. We will outline a more specific plan for how we will use the proceeds after the close.”
Important Note Regarding the Presentation of our Insurance Segment:
Fidelity & Guaranty Life (“FGL”; NYSE: FGL) has reached a definitive merger agreement under which Anbang Insurance Group Co., Ltd. and certain of its subsidiaries will acquire FGL for $26.80 per share in cash. The Company owns 47 million shares in FGL, representing an approximately 80.4% interest as of March 31, 2016. As a result of this agreement, the Company's investment in FGL has been classified as held for sale on the balance sheet and FGL's operations have been classified as discontinued operations. Results for all periods have been reclassified accordingly. FGL's results were previously reflected in the Insurance segment; however, all segment information has been adjusted to exclude FGL's results from this segment. Accordingly, the commentary for the Insurance segment in this release no longer reflects the performance of FGL in either the current or prior year quarters.
Second Quarter Fiscal 2016 Consolidated Highlights:
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• | HRG recorded total revenues of $1.3 billion for the Fiscal 2016 Quarter, an increase of $125.7 million, or 11.0%, as compared to the $1.1 billion recorded in the second quarter of fiscal 2015 (the "Fiscal 2015 Quarter"), as higher Consumer Products revenues, driven primarily by acquisitions completed within the past year and organic revenue growth, more than offset the impact of unfavorable foreign exchange and lower Energy revenues resulting primarily from declines in commodity prices. |
