Rayovac 2006 Annual Report Download - page 5

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working well. The Rayovac brand has returned to its historical value proposi-
tion by communicating to consumers a “Power Challenge,” emphasizing that
Rayovac batteries last as long as the leading premium battery brands, while
costing less. To support this value message, three-time NFL MVP Brett Favre
has signed on as the personality behind Rayovac in print and TV advertising.
Customer response has been positive. Over the past year, the North American
battery business has shown steady sequential improvement and, in the fourth
quarter of fi scal year 2006, helped to deliver a sales increase in our global
battery business – the fi rst in fi ve quarters. Our Latin American business,
where the Rayovac brand enjoys a strong number one market position, also
was an important contributor to this improved performance.
Europe remains the real challenge for us in the battery category. On the pri-
vate-label side, pricing pressures, combined with increased raw material costs,
have mandated aggressive reductions in our European cost structure, primar-
ily through shifting manufacturing to China. On the branded battery side,
there has been a shift away from our historical stronghold of specialty retail
stores and toward large discount merchants. Accordingly, we are shifting the
focus of our sales force toward this market segment. Though we are optimistic
that these production and marketing initiatives will stabilize our European
battery operations, both will require further time, resources and effort.
MIXED RESULTS FROM DIVERSIFIED PRODUCT PORTFOLIO
In the shaving and grooming and personal care categories, Remington con-
tinues to be an overall success story for Spectrum. Although fi scal year 2006
shaving and grooming product sales underperformed, our personal care cat-
egory showed very strong sales growth of 6 percent worldwide. And in the
three years since we acquired the brand, total Remington sales have grown
Over the past year, the North American
battery business has shown steady
sequential improvement and, in the
fourth quarter of fi scal year 2006,
helped to deliver a sales increase in our
global battery business – the fi rst in
fi ve quarters.
Financial Highlights
(in millions, except per share amounts)
2006 2005 2004 2003 2002
Net sales $2,551.8 $2,307.2 $1,417.2 $922.1 $572.7
Net (loss) income (434.0) 46.8 55.8 15.5 29.2
Diluted (loss) earnings per share (8.77) 1.03 1.61 0.48 0.90
Diluted earnings per share, as adjusted 0.41 1.99 1.83 1.27 1.16
Note: see page 9 for reconciliation to U.S. GAAP fi nancial results
SPECTRUM BRANDS | 2006 ANNUAL REPORT 3