Rayovac 2006 Annual Report Download - page 15

SPECTRUM BRANDS | 2006 ANNUAL REPORT 3
of our assets. The assets which are the subject of such discussions,
subject to negotiations of a defi nitive sales agreement, consist pri-
marily of: inventory; goodwill and intangible assets; and property,
plant and equipment, as well as executory contracts related to the
assets to be disposed. We currently expect that any such sale would
be consummated during the second quarter of fi scal 2007. See
Note 18, Subsequent Events, of Notes to Consolidated Financial
Statements of this Annual Report on Form 10-K for additional
information regarding this divestiture.
Our fi nancial performance is infl uenced by a number of fac-
tors, including: general economic conditions; foreign exchange
fl uctuations; trends in consumer markets; our overall product
line mix, including pricing and gross margins which vary by
product line and geographic market; pricing of certain raw mate-
rials and commodities; fuel prices; and our general competitive
position, especially as impacted by our competitors’ advertising
and promotional activities and pricing strategies.
Our Products
We compete in seven major product categories: consumer bat-
teries; pet supplies; lawn and garden; electric shaving and groom-
ing; household insect control; electric personal care products; and
portable lighting. Our broad line of products includes:
• general batteries, including alkaline and zinc carbon;
rechargeable batteries and chargers; hearing aid batteries
and other specialty batteries;
• pet supplies, including aquatic equipment and supplies,
health and grooming products, treats and small animal foods
and other;
• fertilizers, herbicides and other lawn and garden products;
• electric shaving and grooming products;
• household insect control products;
• electric personal care products; and
• portable lighting products.
Net sales for each of our product categories as a percentage of
consolidated net sales is set forth below.
Percentage of
Company Net Sales
Fiscal Year Ended September 30,
2006 2005 2004
Consumer batteries 34% 42% 67%
Pet supplies 21 12 –
Lawn and garden 20 18 –
Electric shaving and grooming 10 12 19
Household insect control 6 6 –
Electric personal care products 6 6 8
Portable lighting 3 4 6
100% 100% 100%
Consumer Batteries
Our general batteries category includes alkaline and zinc car-
bon batteries. We sell a full line of alkaline batteries (AA, AAA, C,
D and 9-volt sizes) to both retail and industrial customers. Our
alkaline batteries are marketed and sold primarily under the
Rayovac and VARTA brands. We also manufacture alkaline batteries
for private labels. Our zinc carbon batteries are also marketed and
sold primarily under the Rayovac and VARTA brands, and are
designed for low- and medium-drain battery-powered devices.
We are currently the largest worldwide marketer of hearing
aid batteries. We sell our hearing aid batteries through retail trade
channels and directly to professional audiologists under several
brand names and private labels, including Beltone, Miracle Ear,
Siemens and Starkey.
We also sell Nickel Metal Hydride (NiMH) rechargeable bat-
teries and a variety of battery chargers under the Rayovac and
VARTA brands.
Our other specialty battery products include photo batteries,
lithium batteries, silver oxide batteries, keyless entry batteries
and coin cells for use in watches, cameras, calculators, communi-
cations equipment and medical instrumentation.
Pet Supplies
Our pet supplies business comprises several leading branded
pet supplies for fi sh, dogs, cats, birds and other small domestic ani-
mals. We have a broad line of consumer and commercial aquatics
products, including integrated aquarium kits, standalone tanks and
stands, fi ltration systems, heaters, pumps, sea salt, aquarium hoods
and lights and other aquarium supplies and accessories. Our largest
aquatics brands are Tetra, Marineland, Perfecto, Jungle and Instant
Ocean. We also sell a variety of specialty pet products, including
treats, stain and odor removal products, grooming aids, bedding
products, premium food, medications and vitamin supplements.
Our largest specialty pet brands include 8in1, Nature’s Miracle,
Dingo, Wild Harvest and Firstrax.
Lawn and Garden
Our lawn and garden business is comprised of several leading
lawn and garden care products, including lawn fertilizers, lawn
control products, herbicides, garden and indoor plant foods, plant
care products, potting soils and other growing media products and
grass seed. During fi scal 2006, we introduced three new products
in the lawn and garden category—Mulch with Weed Stop, the fi rst
premium landscape mulch with weed preventer, the Smart Seeder,
the fi rst ready-to-use combination grass seed container and
spreader, and the only termite killing stakes product for the do-it-
yourself market. Our largest brands are Spectracide, Schultz, Real-
Kill and Garden Safe. We have exclusive brand arrangements for
our Vigoro brand at The Home Depot, our Sta-Green brand at
Lowe’s and our Expert Gardener brand at Wal-Mart. We also sell
2006 Form 10-K Annual Report
Spectrum Brands, Inc.