Dave Lumley is a man on the move, these days. This week, it was England; last week, Florida, as Lumley has jetted about, welcoming new employees under the Spectrum Brands banner.
The newcomers work for Russell Hobbs, the Florida appliance company with products such as George Foreman grills, Black & Decker coffeemakers, Farberware cookware and Juiceman juice extractors.
They are now part of Madison-based Spectrum Brands, with its Rayovac batteries, Remington shavers and hair appliances, Cutter insect repellent and Dingo pet products.
"I think this is going to be fun," Lumley said.
Last week, Spectrum Brands merged with Russell Hobbs in a stock swap valued at $661 million, creating a company with annual revenues of $3 billion.
It was the climax to a turbulent year and a half in which the company filed for bankruptcy and emerged last August with a lighter debt load. Most of that debt was refinanced in conjunction with the merger, extending its maturity from 2012 to 2014 and beyond.
"We are one of the few companies that have gone through Chapter 11 reorganization and come out of it stronger," Lumley said.
"We always had good operations. What we had was too much debt, with, I think, flawed strategy before. We have corrected that strategy now," he said.
The company expects a one-time cost of $23 million to combine the companies with the anticipation of $25 million to $30 million in savings within three years, as a result of combining support operations.
Lumley said he expects about 15 jobs to be added in Madison, resulting from corporate headquarters moving back here from Atlanta, a transition expected to be completed by the end of the year.
Spectrum Brands currently has 925 employees in Wisconsin, including about 425 in Madison.
Bill Chappell, analyst with SunTrust Robinson Humphrey, in Atlanta, said his main concern with the merger is Spectrum Brands' ability to run and grow "multiple, disparate businesses. From pet supplies to garden supplies to kitchen appliances and small electronics."
There are some overlaps but different retailers and different store buyers deal with those products, Chappell said.
Lumley said he thinks the products mesh well, for a number of reasons, including:
• Spectrum Brands' distribution channels in Eastern Europe and Latin America can provide more sales for Russell Hobbs products.
• Remington and Russell Hobbs appliances are manufactured in China. They have electrical cords, heating elements and similar types of boxes. In many cases, they focus on the same retailers, such as Walmart and Target.
• The companies have had similar advertising philosophies, at least with some Russell Hobbs products, Lumley said. "We do not spend our money on national consumer media advertising, but rather, in stores, at the point of sale," giving consumers better value and retailers more profit, he said.
Lumley said Spectrum has streamlined its approach to developing new Remington products, reducing the number of models as a way to keep costs down. Before, there were 27 regional models of rotary razors; now there are seven, he said. "Outside colors or small digital features may be different but their insides are similar."
Chappell said financially, the Russell Hobbs merger is an improvement from Spectrum Brands' acquisition of United Industries in 2005, which added the pet supplies and home and garden units. That purchase pushed the company's debt way up; then the core battery business "started to stumble," he said, with soaring prices for the metals used to make batteries and the world economy on a downturn.
Russell Hobbs, with little debt and as an all-stock acquisition, lowers Spectrum Brands' debt ratio, Chappell said.
Lumley said he thinks the pet products and home and garden units — both of which the company has tried to sell in the past — are now "good long-term businesses" that Spectrum Brands will keep.
He said the company may make some more small acquisitions, adding a brand of product to bolster a portion of the business. But "we're in no hurry there," Lumley added.