Exhibit 99.1
UNITED INDUSTRIES CORPORATION ANNOUNCES RECORD ANNUAL RESULTS
ST. LOUIS, FEBRUARY 12, 2003 - United Industries Corporation (United), the
leading manufacturer and marketer of value-oriented products for the consumer
lawn and garden care and insect control markets in the United States, today
announced record sales for the fourth quarter and the year ended December 31,
2002.
United's actual results were as follows: For the three months ended December 31,
2002, sales before promotion expense increased 105% to $49.9 million from $24.4
million for the three months ended December 31, 2001. For the three months ended
December 31, 2002, net sales increased 108% to $47.8 million from $23.0 million
for the three months ended December 31, 2001. Due to the seasonal nature of the
lawn and garden business, United historically reports losses in the fourth
quarter of each year. For the three months ended December 31, 2002, net loss
decreased 13% to $11.7 million from $13.5 million for the three months ended
December 31, 2001. Fourth quarter 2002 EBITDA loss increased to $7.1 million
from $1.9 million for the fourth quarter of 2001. For the year ended December
31, 2002, sales before promotion expense increased 75% to $521.3 million from
$297.8 million for the year ended December 31, 2001. For the year ended December
31, 2002, net sales increased 76% to $480.0 million from $273.3 million for the
year ended December 31, 2001. For the year ended December 31, 2002, net income
increased to $25.3 million from $6.7 million for the year ended December 31,
2001. Annual 2002 EBITDA increased 25% to $72.9 million from $58.2 million for
the year ended December 31, 2001.
United's pro forma results, reflecting the May 2002 merger with Schultz Company
and the December 2002 acquisition of WPC Brands, Inc., were as follows: For the
three months ended December 31, 2002, sales before promotion expense increased
32% to $51.2 million from $38.9 million for the three months ended December 31,
2001. For the three months ended December 31, 2002, net sales increased 32% to
$49.1 million from $37.2 million for the three months ended December 31, 2001.
For the three months ended December 31, 2002, net loss decreased 18% to $12.1
million from $14.7 million for the three months ended December 31, 2001. Fourth
quarter 2002 EBITDA loss increased to $7.3 million from $2.0 million for the
fourth quarter of 2001. For the year ended December 31, 2002, sales before
promotion expense increased 44% to $598.9 million from $414.8 million for the
year ended December 31, 2001. For the year ended December 31, 2002, net sales
increased 43% to $556.5 million from $388.3 million for the year ended December
31, 2001. For the year ended December 31, 2002, net income increased to $29.6
million from $6.8 million for the year ended December 31, 2001. Annual 2002
EBITDA increased 25% to $83.3 million from $66.9 million for the year ended
December 31, 2001.
Bob Caulk, United's Chairman and CEO, stated, "The fourth quarter of 2002 capped
off our most successful year ever. We are very proud of the broad range of
success we have experienced during 2002. The launch of Spectracide(R)
Triazicide(TM) propelled the Spectracide brand to the number one unit brand
position in the lawn and garden controls category at home centers. We
successfully integrated the new lawn fertilizer brands into our brand portfolio
and improved our operating flexibility with the addition of two fertilizer
production facilities. The merger with Schultz continues to produce positive
results and the acquisition of WPC Brands has increased our insect repellent
share to nearly 37% in this growth category. To further support growth, we
established dedicated customer-focused cross-functional teams, each led by a
senior-level general manager. These teams are positioned to respond quickly and
proactively to the needs of our customers and we are pleased with the feedback
we have received to date. We also realigned our retail sales force to deliver an
even higher degree of customer service by providing more in-season store
service."
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ABOUT UNITED
United is the leading manufacturer and marketer of value-oriented products for
the consumer lawn and garden care and insect control markets in the United
States and offers one of the broadest lines in the industry under a variety of
brand names. The company's household brands include Hot Shot(R) and Cutter(R).
The company's lawn and garden brands include Spectracide(R), Spectracide
Triazicide(TM), Spectracide Terminate(R), Garden Safe(TM), Real-Kill(R) and
No-Pest(R) in the controls category as well as Sta-Green(R), Vigoro(R),
Schultz(R), Peters(R), Bandini(R) and Best(R) brands in the lawn and garden
fertilizer and organic growing media categories.
Detailed financial information is included in the attached addendum. The
unaudited pro forma consolidated results of operations are presented to
illustrate the potential operating results that might possibly have been
achieved had the transactions included therein been completed as of January 1,
2001 but do not purport to be indicative of the operating results that would
definitely have been achieved had the transactions been completed as of such
date or which may be obtained in the future.
More information about United can be found at www.spectrumbrands.com.
CERTAIN STATEMENTS IN THIS PRESS RELEASE REGARDING OUR BUSINESS, WITH THE
EXCEPTION OF HISTORICAL FACTS, MAY BE "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21G OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WHICH INVOLVE RISKS AND
UNCERTAINTIES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT
EXPECTATIONS OF UNITED (THE COMPANY). ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THESE STATEMENTS AS A RESULT OF CHANGES IN EXTERNAL COMPETITIVE MARKET FACTORS,
UNANTICIPATED CHANGES IN THE FINANCIAL PERFORMANCE OF THE COMPANY OR ITS
CUSTOMERS, THE COMPANY'S INDUSTRY OR THE ECONOMY IN GENERAL, AS WELL AS VARIOUS
OTHER FACTORS DESCRIBED IN THE COMPANY'S FILINGS WITH THE SECURITIES EXCHANGE
COMMISSION, INCLUDING PUBLIC PERCEPTION REGARDING THE SAFETY OF OUR PRODUCTS AND
WEATHER CONDITIONS. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE OR
REVISE FORWARD-LOOKING STATEMENTS MADE BY OR ON ITS BEHALF, WHETHER AS A RESULT
OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
(Bloomberg Symbol: 14496Z)
CONTACT: Daniel J. Johnston
United Industries Corporation
(314) 427-0780
UNITED INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------- ----------------------------
2002 2001 2002 2001
-------- -------- -------- --------
Sales before promotion expense $ 49,894 $ 24,371 $521,286 $297,776
Promotion expense 2,108 1,386 41,296 24,432
-------- -------- -------- --------
Net sales 47,786 22,985 479,990 273,344
-------- -------- -------- --------
Operating costs and expenses:
Cost of goods sold 30,961 13,560 305,644 148,371
Selling, general and administrative expenses 26,019 15,534 113,162 74,689
Facilities and organizational rationalization - 5,550 - 5,550
-------- -------- -------- --------
Total operating costs and expenses 56,980 34,644 418,806 228,610
-------- -------- -------- --------
Operating income (loss) (9,194) (11,659) 61,184 44,734
Interest expense, net 7,819 8,033 32,410 35,841
-------- -------- -------- --------
Income (loss) before income tax expense (benefit) (17,013) (19,692) 28,774 8,893
Income tax expense (benefit) (5,350) (6,208) 3,438 2,167
-------- -------- -------- --------
Net income (loss) $(11,663) $(13,484) $ 25,336 $ 6,726
======== ======== ======== ========
UNITED INDUSTRIES CORPORATION AND SUBSIDIARIES
OTHER CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------- ----------------------------
2002 2001 2002 2001
-------- -------- -------- --------
EBITDA:
Net income (loss) $(11,663) $(13,484) $25,336 $ 6,726
Addback:
Interest expense, net 7,819 8,033 32,410 35,841
Income tax expense (benefit) (5,350) (6,208) 3,438 2,167
Depreciation and amortization 2,109 1,260 10,240 4,918
Facilities, organizational and product line
rationalization - 8,500 - 8,500
Purchase accounting effect of inventory write-up - - 1,500 -
-------- -------- -------- --------
EBITDA (1) $ (7,805) $ (1,899) $72,924 $58,152
======== ======== ======== ========
(1) EBITDA represents income (loss) before net interest expense, income tax
expense (benefit), depreciation and amortization, and facilities,
organizational and product line rationalization and purchase accounting
effect of inventory write-up.
UNITED INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
DECEMBER 31,
------------------------
2002 2001
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 10,318 $ -
Accounts receivable, net 23,321 21,585
Inventories 87,762 49,092
Prepaid expenses 11,350 6,491
-------- --------
Total current assets 132,751 77,168
-------- --------
Equipment and leasehold improvements, net 34,995 27,930
Deferred income tax 105,141 112,505
Goodwill and intangible assets, net 100,091 43,116
Other assets, net 13,025 11,837
-------- --------
Total assets $386,003 $ 272,556
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current maturities of long-term debt
and capital lease obligation $ 9,665 $ 5,711
Accounts payable 27,063 23,459
Accrued expenses 43,982 34,006
Short-term borrowings - 23,450
-------- --------
Total current liabilities 80,710 86,626
-------- --------
Long-term debt, net of current maturities 391,493 318,386
Capital lease obligation, net of current maturities 3,778 4,221
Other liabilities 5,019 7,740
-------- --------
Total liabilities 481,000 416,973
-------- --------
Stockholders' deficit (94,997) (144,417)
-------- --------
Total liabilities and stockholders' deficit $386,003 $ 272,556
======== ========
UNITED INDUSTRIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------- ----------------------------
2002 2001 2002 2001
-------- -------- -------- --------
Sales before promotion expense $ 51,214 $ 38,857 $598,944 $414,815
Promotion expense 2,128 1,691 42,468 26,473
-------- -------- -------- --------
Net sales 49,086 37,166 556,476 388,342
-------- -------- -------- --------
Operating costs and expenses:
Cost of goods sold 31,900 23,772 358,659 235,862
Selling, general and administrative expenses 26,746 20,295 126,207 96,562
Facilities and organizational rationalization - 5,550 - 5,550
-------- -------- -------- --------
Total operating costs and expenses 58,646 49,617 484,866 337,974
-------- -------- -------- --------
Operating income (loss) (9,560) (12,451) 71,610 50,368
Interest expense, net 8,079 9,058 34,933 40,413
-------- -------- -------- --------
Income (loss) before income tax expense (benefit) (17,639) (21,509) 36,677 9,955
Income tax expense (benefit) (5,540) (6,808) 7,105 3,180
-------- -------- -------- --------
Net income (loss) $(12,099) $(14,701) $ 29,572 $ 6,775
======== ======== ======== ========
UNITED INDUSTRIES CORPORATION AND SUBSIDIARIES
PRO FORMA OTHER CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------- ----------------------------
2002 2001 2002 2001
-------- -------- ------- -------
PRO FORMA EBITDA:
Net income (loss) $(12,099) $(14,701) $29,572 $ 6,775
Addback:
Interest expense, net 8,079 9,058 34,933 40,413
Income tax expense (benefit) (5,540) (6,808) 7,105 3,180
Depreciation and amortization 2,237 1,978 11,715 7,994
Facilities, organizational and product line
rationalization - 8,500 - 8,500
-------- -------- ------- -------
PRO FORMA EBITDA (1) $ (7,323) $ (1,973) $83,325 $66,862
======== ======== ======= =======
(1) EBITDA represents income (loss) before net interest expense, income tax
expense (benefit), depreciation and amortization, and facilities,
organizational and product line rationalization.