Rayovac 2004 Annual Report Download - page 96

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RAYOVAC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
corporate headquarters and the integration of the Remington business, (vi) changes in estimates associated with
fiscal 2003 restructuring initiatives in North America and Europe of approximately $1,300 reflecting lower
termination benefits and lower distributor termination costs than initially estimated.
2004 Restructuring Initiatives Summary
Termination
Benefits
Other
Costs Total
Expense accrued ............................... $7,000 $ 1,400 $ 8,400
Expense as incurred ............................. 1,400 4,000 5,400
Cash expenditures .............................. (6,400) (3,100) (9,500)
Non cash charges ............................... — (800) (800)
Accrual Balance at September 30, 2004 ............. $2,000 $ 1,500 $ 3,500
2003 Restructuring and Related Charges
During 2003, Cost of goods sold include restructuring and related charges of approximately $21,100 related
to: (i) the closure in October 2002 of the Company’s Mexico City, Mexico plant and integration of production
into the Company’s Guatemala City, Guatemala manufacturing location, resulting in charges of approximately
$6,200, including termination payments of approximately $1,400, fixed asset and inventory impairments of
approximately $4,300, and other shutdown related expenses of approximately $500, (ii) the closure of operations
at the Company’s Madison, Wisconsin packaging facility and combination with the Company’s Middleton,
Wisconsin distribution center into a new leased complex in Dixon, Illinois resulting in charges of approximately
$12,400, including termination costs of approximately $2,400 and non cash pension curtailment costs of
approximately $700, fixed asset and inventory impairments of approximately $6,900, and relocation expenses
and other shutdown related expenses of approximately $2,400, (iii) a series of restructuring initiatives impacting
the Company’s manufacturing functions in Europe, North America, and Latin America resulting in charges of
approximately $2,800, including termination benefits of approximately $1,800 and inventory and asset
impairments of approximately $1,000, and (iv) a reduction of approximately $300 related to a revision of 2001
restructuring initiative estimates for the anticipated costs to close its Wonewoc, Wisconsin facility.
During 2003, Operating expenses include restructuring and related charges of approximately $11,500
related to: (i) the closure of operations at the Company’s Middleton, Wisconsin distribution center and
combination with the Company’s Madison, Wisconsin packaging facility into a new leased complex in Dixon,
Illinois resulting in charges of approximately $1,400, including termination costs of approximately $300, fixed
asset impairments of approximately $300, and relocation expenses and other shutdown related expenses of
approximately $800, and (ii) a series of restructuring initiatives impacting the Company’s sales, marketing, and
administrative functions in Europe, North America, and Latin America resulting in charges of approximately
$10,100, including termination costs of approximately $7,100, distributor termination costs of approximately
$900, research and development contract termination costs of approximately $500, fixed asset impairments of
$300, and legal and other expenses of approximately $1,300.
The move to the new combined distribution and packaging facility was completed in the third quarter of
2003 and the closure of the Madison, Wisconsin and Middleton, Wisconsin facilities occurred in the fourth
quarter of 2003. The sales, marketing, operations and administrative restructuring initiatives were completed
during the fourth quarter of 2003.
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