2013 Q4 Form 10-K Financial Statement

#000119312514069698 Filed on February 26, 2014

View on sec.gov

Income Statement

Concept 2013 Q4 2013 2012 Q4
Revenue $964.6M $3.704B $947.9M
YoY Change 1.76% 18.14% 8.2%
Cost Of Revenue $553.7M $2.409B $645.4M
YoY Change -14.21% 15.06% 1.32%
Gross Profit $334.2M $1.295B $303.5M
YoY Change 10.12% 10.69% 26.93%
Gross Profit Margin 34.65% 34.97% 32.02%
Selling, General & Admin $237.7M $938.7M $275.3M
YoY Change -13.66% 7.51% 9.16%
% of Gross Profit 71.13% 72.48% 90.71%
Research & Development $50.80M
YoY Change 21.82%
% of Gross Profit 3.92%
Depreciation & Amortization $24.20M $77.20M $22.30M
YoY Change 8.52% -14.41% -37.18%
% of Gross Profit 7.24% 5.96% 7.35%
Operating Expenses $240.8M $73.10M $277.8M
YoY Change -13.32% -28.61% 8.69%
Operating Profit $81.90M $323.0M $7.500M
YoY Change 992.0% 125.56% -106.86%
Interest Expense -$2.200M $7.200M -$2.100M
YoY Change 4.76% -15.29% -30.0%
% of Operating Profit -2.69% 2.23% -28.0%
Other Income/Expense, Net $6.600M -$5.300M $400.0K
YoY Change 1550.0% -1160.0% 33.33%
Pretax Income $57.70M $310.5M $5.800M
YoY Change 894.83% 303.25% -105.17%
Income Tax $16.80M $101.5M -$12.80M
% Of Pretax Income 29.12% 32.69% -220.69%
Net Earnings $64.20M $229.7M $18.40M
YoY Change 248.91% 93.51% -125.92%
Net Earnings / Revenue 6.66% 6.2% 1.94%
Basic Earnings Per Share $0.39 $1.39 $0.11
Diluted Earnings Per Share $0.37 $1.34 $0.11
COMMON SHARES
Basic Shares Outstanding 166.2M shares 165.5M shares 162.8M shares
Diluted Shares Outstanding 171.3M shares

Balance Sheet

Concept 2013 Q4 2013 2012 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $241.4M $241.4M $336.0M
YoY Change -28.15% -28.15% 178.15%
Cash & Equivalents $241.4M $241.4M $336.0M
Short-Term Investments
Other Short-Term Assets $127.9M $254.3M $153.0M
YoY Change -16.41% 66.21% 1.8%
Inventory $428.9M $428.9M $357.2M
Prepaid Expenses
Receivables $402.8M $402.8M $381.7M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.327B $1.327B $1.228B
YoY Change 8.1% 8.1% 28.78%
LONG-TERM ASSETS
Property, Plant & Equipment $468.3M $468.3M $445.7M
YoY Change 5.07% -8.07% -15.23%
Goodwill $1.434B $1.295B
YoY Change 10.69% -5.22%
Intangibles $628.9M $683.6M
YoY Change -8.0% -2.75%
Long-Term Investments
YoY Change
Other Assets $42.00M $319.7M $71.60M
YoY Change -41.34% 346.51% -19.64%
Total Long-Term Assets $2.851B $2.851B $2.646B
YoY Change 7.74% 7.74% -1.43%
TOTAL ASSETS
Total Short-Term Assets $1.327B $1.327B $1.228B
Total Long-Term Assets $2.851B $2.851B $2.646B
Total Assets $4.178B $4.178B $3.874B
YoY Change 7.85% 7.85% 6.49%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $314.8M $314.8M $287.0M
YoY Change 9.69% 9.69% 10.09%
Accrued Expenses $357.1M $356.8M $317.4M
YoY Change 12.51% 0.51%
Deferred Revenue
YoY Change
Short-Term Debt $6.000M $6.000M $5.500M
YoY Change 9.09% 9.09% 44.74%
Long-Term Debt Due $0.00 $0.00 $22.50M
YoY Change -100.0% -100.0% 28.57%
Total Short-Term Liabilities $738.7M $738.7M $632.4M
YoY Change 16.81% 16.81% 5.79%
LONG-TERM LIABILITIES
Long-Term Debt $350.0M $350.0M $297.5M
YoY Change 17.65% 17.65% -23.58%
Other Long-Term Liabilities $73.40M $238.9M $82.60M
YoY Change -11.14% -28.75% 11.62%
Total Long-Term Liabilities $423.4M $588.9M $380.1M
YoY Change 11.39% -6.94% -17.96%
TOTAL LIABILITIES
Total Short-Term Liabilities $738.7M $738.7M $632.4M
Total Long-Term Liabilities $423.4M $588.9M $380.1M
Total Liabilities $1.525B $1.529B $1.489B
YoY Change 2.4% 2.4% -1.6%
SHAREHOLDERS EQUITY
Retained Earnings $200.8M $41.00M
YoY Change 389.76% -152.77%
Common Stock $1.700M $1.600M
YoY Change 6.25% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $79.80M $16.90M
YoY Change 372.19% 16800.0%
Treasury Stock Shares 2.404M shares 700.1K shares
Shareholders Equity $2.649B $2.649B $2.381B
YoY Change
Total Liabilities & Shareholders Equity $4.178B $4.178B $3.874B
YoY Change 7.85% 7.85% 6.49%

Cashflow Statement

Concept 2013 Q4 2013 2012 Q4
OPERATING ACTIVITIES
Net Income $64.20M $229.7M $18.40M
YoY Change 248.91% 93.51% -125.92%
Depreciation, Depletion And Amortization $24.20M $77.20M $22.30M
YoY Change 8.52% -14.41% -37.18%
Cash From Operating Activities $131.6M $297.8M $163.4M
YoY Change -19.46% 5.3% 7.22%
INVESTING ACTIVITIES
Capital Expenditures -$41.50M $96.70M -$29.00M
YoY Change 43.1% 28.93% 7.01%
Acquisitions $302.0M
YoY Change 1448.72%
Other Investing Activities $100.0K $200.0K -$19.30M
YoY Change -100.52% -96.49% -19400.0%
Cash From Investing Activities -$41.40M -$396.7M -$48.30M
YoY Change -14.29% 357.55% 78.89%
FINANCING ACTIVITIES
Cash Dividend Paid $49.90M
YoY Change
Common Stock Issuance & Retirement, Net $52.10M
YoY Change 492.05%
Debt Paid & Issued, Net $190.0M
YoY Change 21.17%
Cash From Financing Activities -5.700M 4.100M 4.500M
YoY Change -226.67% -73.89% -103.4%
NET CHANGE
Cash From Operating Activities 131.6M 297.8M 163.4M
Cash From Investing Activities -41.40M -396.7M -48.30M
Cash From Financing Activities -5.700M 4.100M 4.500M
Net Change In Cash 84.50M -94.80M 119.6M
YoY Change -29.35% -144.76% -1808.57%
FREE CASH FLOW
Cash From Operating Activities $131.6M $297.8M $163.4M
Capital Expenditures -$41.50M $96.70M -$29.00M
Free Cash Flow $173.1M $201.1M $192.4M
YoY Change -10.03% -3.22% 7.19%

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<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: ARIAL" size="2"><b>Customer Program Costs</b>&#xA0;&#xA0;&#xA0;&#xA0;Customer programs and incentives are a common practice in our businesses. Our businesses incur customer program costs to obtain favorable product placement, to promote sales of products and to maintain competitive pricing. Customer program costs and incentives, including rebates and promotion and volume allowances, are accounted for in either &#x201C;net sales&#x201D; or the category &#x201C;selling, general and administrative expenses&#x201D; at the time the program is initiated and/or the revenue is recognized. The costs are predominantly recognized in &#x201C;net sales&#x201D; and include, but are not limited to, volume allowances and rebates, promotional allowances, and cooperative advertising programs. These costs are recorded at the later of the time of sale or the implementation of the program based on management&#x2019;s best estimates. Estimates are based on historical and projected experience for each type of program or customer. Volume allowances are accrued based on management&#x2019;s estimates of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, merchandising support, level of returns and customer training. Management periodically reviews accruals for these rebates and allowances, and adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations). The costs typically recognized in &#x201C;selling, general and administrative expenses&#x201D; include product displays, point of sale materials, and media production costs. The costs included in the &#x201C;selling, general and administrative expenses&#x201D; category were $46.0 million, $46.2 million and $47.4 million for the years ended December&#xA0;31, 2013, 2012 and 2011, respectively.</font></p> </div>
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<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: ARIAL" size="2"><b>23.&#xA0;&#xA0;&#xA0;&#xA0;Contingencies</b></font></p> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: ARIAL" size="2"><b>Litigation</b></font></p> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px"><font style="FONT-FAMILY: ARIAL" size="2">The Company is a defendant in lawsuits associated with the normal conduct of its businesses and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon the Company&#x2019;s results of operations, cash flows or financial condition, and, where appropriate, these actions are being vigorously contested.</font></p> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: ARIAL" size="2"><b>Environmental</b></font></p> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: ARIAL" size="2">Compliance with federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, did not have a material effect on capital expenditures, earnings or the competitive position of Home&#xA0;&amp; Security. Several of our subsidiaries have been designated as potentially responsible parties (&#x201C;PRP&#x201D;) under &#x201C;Superfund&#x201D; or similar state laws.&#xA0;As of December&#xA0;31, 2013, eight such instances have not been dismissed, settled or otherwise resolved.&#xA0;In calendar year 2013, we were identified as a PRP in one new instance, which we settled in 2013. In most instances where our subsidiaries are named as a PRP, we enter into cost-sharing arrangements with other PRPs. We give notice to insurance carriers of potential PRP liability, but very rarely, if ever, receive reimbursement from insurance for PRP costs. We believe that the cost of complying with the present environmental protection laws, before considering estimated recoveries either from other PRPs or insurance, will not have an adverse effect on our results of operations, cash flows or financial condition. At December&#xA0;31, 2013 and 2012, we had accruals of $5.6&#xA0;million and $6.8 million, respectively, relating to environmental compliance and clean up including, but not limited to, the above mentioned Superfund sites.</font></p> </div>
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