Graco 2007 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2007 Graco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

Newell Rubbermaid Inc. 2007 Annual Report
51
Acquisition of Dymo
On November 23, 2005, the Company acquired Dymo, a global leader in designing, manufacturing and marketing on-demand labeling solutions, from
Esselte AB. The purchase price of $699.2 million was finalized in 2006, after consideration of certain working capital and other adjustments. The Company
funded the purchase payment through a combination of available cash of $480.2 million and debt of $219.0 million from pre-existing credit facilities.
In 2006, the Company finalized the purchase price allocation of $699.2 million to the identifiable assets and liabilities. The purchase price allocation
was based on management’s estimate of fair value using the assistance of third party appraisals at the date of acquisition as follows (in millions):
Current assets $ 33.8
Property, plant & equipment, net 21.5
Goodwill 609.3
Other intangible assets, net 118.9
Other assets 0.2
Total assets $783.7
Current liabilities $ 38.1
Deferred income taxes 42.9
Other noncurrent liabilities 3.5
Total liabilities $ 84.5
The allocation of the purchase price resulted in the recognition of $609.3 million of goodwill, primarily related to the anticipated future earnings
and cash flows of the Dymo business including the estimated effects of the integration of this business into the Office Products segment. The transaction
resulted in the recognition of $118.9 million in intangible assets consisting primarily of customer lists, patents and trademarks. Approximately $77.4 million
were indefinite-lived intangible assets related to trademarks and $41.5 million related to finite-lived intangible assets that will be amortized over periods
of 3 to 10 years with a weighted average amortization period of 5.3 years.
The transaction summarized above was accounted for using the purchase method of accounting and the results of operations are included in the
Company’s Consolidated Financial Statements since the acquisition date. The acquisition costs included in the purchase price were allocated to goodwill.
The unaudited consolidated results of operations on a pro forma basis, as though the November 23, 2005 acquisition of Dymo had been completed on
January 1, 2005, are as follows for the year ended December 31, (in millions, except per share amounts):
2005
Net sales $5,923.2
Income from continuing operations $ 417.0
Net income $ 262.0
Basic earnings per share:
Income from continuing operations $ 1.52
Net income $ 0.95
Diluted earnings per share:
Income from continuing operations $ 1.52
Net income $ 0.95
These pro forma financial results have been prepared for comparative purposes only and include certain adjustments, such as increased interest
expense on acquisition debt. They do not reflect the effect of synergies that are expected to result from integration.