Not such a pretty picture…

August 6, 2007

images-1.jpegBack on March 27, 2006, I footnoted Spectrum Brands (SPC), which makes Rayovac batteries and Remington personal care products, including these products endorsed by Cindy Crawford. At the time, I questioned the company for providing an overly rosy view of its five year performance in its proxy statement. My key point was that companies that find a need to airbrush something that’s relatively easy to fact-check are probably playing around with other numbers that are much more difficult to dig through.

While there hasn’t been any charges of accounting fraud that I’ve come across (though there have been two shareholder lawsuits alleging various problems), there’s been something of a revolving door when it comes to management. And, there’s the stock price which has declined about 80% from $21.65 on 3/27/2006 to its current price of just over $4 a share.

I was reminded about all of this when I saw this 8K that Spectrum filed late Friday. In theory, the filing provided the details of the separation agreement between Spectrum and former CFO Randall Steward, whose departure was announced back in June. But just like the earlier 5-year chart, the separation agreement was airbrushed so that investors couldn’t get a bottom-line figure on the total value of Steward’s parting gifts. Once a company starts futzing around with one set of numbers, what’s to stop them from doing it with others?

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