Rayovac 2006 Annual Report Download - page 108

96 SPECTRUM BRANDS | 2006 ANNUAL REPORT
As of March 31, 2004
Current assets $15,000
Property, plant, and equipment 11,000
Goodwill 13,000
Other assets 2,000
Total assets acquired 41,000
Current liabilities 10,000
Total debt 14,000
Total liabilities assumed 24,000
Net assets acquired $17,000
Less: Cash acquired (5,500)
Payments for acquisitions $11,500
None of the goodwill acquired in this transaction is deduct-
ible for tax purposes. See also Note 6, Intangible Assets, for
additional information on the intangible assets acquired in the
Ningbo acquisition.
Supplemental Pro Forma Information (Unaudited)
The following refl ects the Company’s pro forma results had the
results of the Tetra, United and Microlite businesses been included
for all periods beginning after September 30, 2003. The results of
Jungle Labs and Ningbo are not included in the pro forma results
as they are not signifi cant. Adjustments to the number of shares
used to calculate earnings per share have also been made to present
shares as if the 13,750 treasury shares issued in connection with the
United acquisition were outstanding on October 1, 2003.
2006 Form 10-K Annual Report
Spectrum Brands, Inc.
2006 2005 2004
Net sales
Reported net sales $2,551,751 $2,307,154 $1,417,186
United pro forma adjustments – 217,551 937,543
Tetra pro forma adjustments – 137,003 231,804
Microlite pro forma adjustments – – 37,618
Pro forma net sales $2,551,751 $2,661,708 $2,624,151
Income from continuing operations
Reported (loss) income from continuing operations $ (428,452) $ 41,363(A) $ 56,160
United pro forma adjustments – (23,773)(B) 111,812(C)
Tetra pro forma adjustments – 6,460 12,024
Microlite pro forma adjustments – – (10,687)(D)
Pro forma (loss) income from continuing operations $ (428,452) $ 24,050 $ 169,309
Pro forma basic earnings per share
(Loss) Income from continuing operations $ (8.66) $ 0.85 $ 1.19
United pro forma adjustments – (0.48) 2.37
Tetra pro forma adjustments – 0.13 0.25
Microlite pro forma adjustments – – (0.23)
Pro forma (loss) income from continuing operations $ (8.66) $ 0.50 $ 3.58
Pro forma diluted earnings per share
(Loss) Income from continuing operations $ (8.66) $ 0.82 $ 1.16
United pro forma adjustments – (0.48) 2.31
Tetra pro forma adjustments – 0.13 0.25
Microlite pro forma adjustments – – (0.22)
Pro forma (loss) income from continuing operations $ (8.66) $ 0.47 $ 3.50
(A) Reported income from continuing operations includes certain charges and other items
related to the Tetra and United acquisitions that are not expected to recur. For 2005, these
charges include approximately $38,000 charged to Cost of goods sold related to the fair
value adjustment applied to acquired inventory for United and Tetra and the write-off of
approximately $12,000 of debt issuance costs charged to interest expense related to the
debt refi nancing that occurred in connection with the acquisition.
(B) United pro forma adjustments in 2005 represent United’s loss from continuing opera-
tions in fi scal 2005 in the period prior to the Company’s ownership, from October 1,
2004 through February 6, 2005. Also included in this amount are certain charges and
other items related to the United acquisition that are not expected to recur. For 2005,
these charges include approximately $12,000 of transaction related costs incurred by
United in connection with its acquisition by Spectrum, approximately $3,000 incurred
by United related to its acquisition of United Pet Group and approximately $2,000 of
amortization expense associated with intangible assets. Lastly, consolidated interest
expense is expected to be reduced due to the Company’s retirement of United debt at
the date of acquisition.
(C) United pro forma adjustments in 2004 represent United’s income from continuing opera-
tions in fi scal 2004 in the comparable period prior to the Company’s ownership, from
October 1, 2003 through September 30, 2004. These amounts include certain charges
and other items related to the United acquisition that are not expected to recur. For
2004, these charges include a reduction of income tax expense of approximately
$104,000, refl ecting a full reversal of United’s valuation allowance originally estab-
lished against the tax deductible goodwill deduction and certain net operating loss
carryforwards that were generated in 1999 through 2003. Lastly, consolidated inter-
est expense is expected to be reduced due to the Company’s retirement of United debt
at the date of acquisition.
(D) Microlite’s pro forma adjustments in 2004 represent Microlite’s income from continuing
operations in the comparable periods prior to the Company’s ownership. These amounts
include certain charges incurred by Microlite that are not expected to recur. These
charges include interest expense which will be reduced as a result of the Company’s
recapitalization of assumed debt, and lowered interest rates and hedging costs as a
result of the recapitalized debt and access to more effi cient capital markets. In addition,
the pro forma results include charges related to the establishment of valuation allow-
ances for certain deferred tax assets prior to acquisition.