What test did you do? Did the floodlights come on with the sensor switch in the Test position? Did you wait two minutes after turning the circuit on? Is the sensor in the dark? If your answer is yes to those questions, then try the following:
Double check the wiring. Sometimes a wire will come loose if the stranded wire from the fixture is wrapped all the way around a solid house wire. The solution is to gently bend the bare tip of the solid wire in a soft s shape so that the stranded wire does not completely wrap around the solid wire when the wire nut is twisted. (I know that you said the sensor red light is coming on but the additional load of the floodlights' current may not flow if there is a loose connection, very little current needs to flow to operate the sensor.) (The wires should be connected something like this -White from house to white for sensor (and to whites for lights unless this light connection is done internally in the sensor by Heath Zenith), Black from house to sensor, Other colored wire from sensor to lights (again unless this light connection is done internally in the sensor by Heath Zenith)- Also check that the spotlights are not burnt out and that they are tight in the sockets.

http://www.heath-zenith.com/servsup_instvideos.htm