Rayovac 2004 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 2004 Rayovac 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 115

  • 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
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115

Discontinued Operations. Our loss from discontinued operations of $0.4 million for fiscal 2004 reflects the
operating results of our Remington Service Centers. Net sales from discontinued operations were approximately
$21 million for the current year. Service Centers in the United States and United Kingdom were closed during
fiscal 2004.
Segment Results. We manage operations in three reportable segments based upon geographic area. North
America includes the United States and Canada; Latin America includes Mexico, Central America, South
America and the Caribbean; Europe/Rest of World (“Europe/ROW”) includes the United Kingdom, continental
Europe, China, Australia and all other countries in which we do business. We evaluate segment profitability
based on operating income before corporate expenses and restructuring and related charges. Corporate expenses
includes corporate purchasing expense, general and administrative expense, and certain research and
development expenses.
North America 2004 2003
(in millions)
Net sales from external customers .................................................. $654 $376
Segment profit .................................................................. $131 $ 65
Segment profit as a % of net sales .................................................. 20.0% 17.3%
Assets ........................................................................ $645 $625
Our sales to external customers in fiscal 2004 increased to $654 million from $376 million the previous
year, a 74% increase. This increase was primarily due to the impacts of the Remington acquisition, which
contributed approximately $241 million and increases in our general battery business primarily driven by a 16%
increase in alkaline battery sales.
Our profitability in fiscal 2004 increased to $131 million from $65 million the previous year. The increase
in profitability primarily reflects the impacts of the Remington acquisition and sales increases associated with our
battery business. Our profitability margin increased to 20.0% from 17.3% last year, primarily due to the benefits
of Remington’s higher margin products, offset by higher advertising expenses as a percentage of sales.
Our assets at September 30, 2004 increased approximately 3 percent to $645 million from $625 million at
September 30, 2003. The increase in assets is primarily attributable to changes in receivables and inventories.
Intangible assets are approximately $292 million and primarily relate to the Remington acquisition. The
Remington acquisition was completed on September 30, 2003; thus, the total assets for Remington are included
in the Consolidated Balance Sheets as of September 30, 2004 and 2003. The purchase price allocation for the
Remington acquisition was finalized in September 2004.
Europe/ROW 2004 2003
(in millions)
Net sales from external customers ................................................ $618 $422
Segment profit ................................................................ $ 96 $ 54
Segment profit as a % of net sales ................................................ 15.5% 12.8%
Assets ...................................................................... $599 $537
Our sales to external customers in fiscal 2004 increased to $618 million from $422 million the previous
year, a 46% increase, primarily due to the impacts of acquisitions and favorable foreign currency movements.
The Remington acquisition contributed approximately $147 million to the sales increase, Ningbo contributed
approximately $8 million, with the remaining increase primarily attributable to the favorable impact of foreign
currency exchange rates. Sales volumes reflected a 14% increase in alkaline sales, as well as growth in hearing
aid battery and lighting products sales partially offset by softness in zinc carbon sales.
Our profitability in fiscal 2004 increased to $96 million from $54 million the previous year. The
profitability increase was primarily driven by the Remington acquisition, gross profit margin expansion reflecting
20