Rayovac 2004 Annual Report Download - page 37

(iv) Europe/ROW fixed asset impairments and termination benefits of approximately $3.3 million associated with
Remington integration initiatives, (v) relocation and recruiting expenses of approximately $3.0 million primarily
associated with the integration of the Remington business and the move to our new corporate headquarters, (vi)
changes in estimates associated with fiscal 2003 restructuring initiatives in North America and Europe of $1.3
million reflecting lower termination benefits and lower distributor termination costs than initially estimated, and
(vii) favorable changes in estimates of approximately $1.1 million related to a reduction of previously established
inventory obsolescence reserves associated with 2003 restructuring initiatives.
In fiscal 2003, we recorded restructuring and related charges of $32.6 million associated with our cost
reduction initiatives, as more fully described above under the heading “Cost Reduction Initiatives—Fiscal 2003”,
relating to: (i) approximately $13.0 million of employee termination benefits for approximately 650 notified
employees and non cash costs of approximately $0.7 million associated with the write-off of pension intangible
assets associated with the curtailment of our Madison, Wisconsin packaging facility pension plan, (ii)
approximately $12.8 million of equipment, inventory and other asset write-offs primarily reflecting the
abandonment of equipment and inventory associated with the closure of our Mexico City, Mexico plant and
inventory and fixed asset impairments related to the closure of our Wisconsin packaging and distribution
locations, (iii) approximately $6.1 million of other expenses which include distributor termination costs of
approximately $0.9 million, research and development contract termination costs of approximately $0.5 million,
and other legal and facility shutdown expenses of approximately $4.7 million, net of a $0.3 million change in
estimate reducing our anticipated costs to close our Wonewoc, Wisconsin facility.
In fiscal 2003, we recorded restructuring and related charges in cost of goods sold of approximately $21.1
million including amounts related to: (i) the closure in October 2002 of our Mexico City, Mexico plant and
integration of production into our Guatemala City, Guatemala manufacturing location, resulting in charges of
approximately $6.2 million, including termination payments of approximately $1.4 million, fixed asset and
inventory impairments of approximately $4.3 million, and other shutdown related expenses of approximately $0.5
million, (ii) the closure of operations at our Madison, Wisconsin packaging facility and combination with our
Middleton, Wisconsin distribution center into a new leased complex in Dixon, Illinois resulting in charges of
approximately $12.4 million, including termination costs of approximately $2.4 million and non cash pension
curtailment costs of approximately $0.7 million, fixed asset and inventory impairments of approximately $6.9
million, and relocation expenses and other shutdown related expenses of approximately $2.4 million, (iii) a series of
restructuring initiatives impacting our manufacturing functions in Europe, North America, and Latin America
resulting in charges of approximately $2.8 million, including termination benefits of approximately $1.8 million and
inventory and asset impairments of approximately $1.0 million, and (iv) a change in estimate relating to our
anticipated costs to close our Wonewoc, Wisconsin facility resulting in a credit of $0.3 million.
In fiscal 2003, we recorded restructuring and related charges in operating expenses of approximately $11.5
million including amounts related to: (i) the closure of operations at our Middleton, Wisconsin distribution center
and combination with our Madison, Wisconsin packaging facility into a new leased complex in Dixon, Illinois
resulting in charges of approximately $1.4 million, including termination costs of approximately $0.3 million,
fixed asset impairments of approximately $0.3 million, and relocation expenses and other shutdown related
expenses of approximately $0.8 million, and (ii) a series of restructuring initiatives impacting our sales,
marketing, and administrative functions in Europe, North America, and Latin America resulting in charges of
approximately $10.1 million, including termination costs of approximately $7.1 million, distributor termination
costs of approximately $0.9 million, research and development contract termination costs of approximately $0.5
million, fixed asset impairments of $0.3 million, and legal and other expenses of approximately $1.3 million. The
carrying value of assets held for sale under restructuring plans is approximately $8.3 million, and is included in
Prepaid expense and other in our Consolidated Balance Sheets.
Interest Expense. Interest expense in fiscal 2004 increased to $66 million from $37 million in fiscal 2003.
This increase was primarily due to the increase in debt of approximately $350 million associated with the
Remington acquisition. The increase in interest expense was tempered by slightly lower interest rates in fiscal
2004 as well as net repayments of debt totaling approximately $113 million during fiscal 2004.
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