Rayovac 2009 Annual Report Download - page 46

Table of Contents
Index to Financial Statements
appropriate fresh−start reporting date to coincide with our normal financial period close for the month of August 2009. Upon adoption of fresh−start
reporting, the recorded amounts of assets and liabilities were adjusted to reflect their estimated fair values. Accordingly, the reported historical financial
statements of Old Spectrum prior to the adoption of fresh− start reporting for periods ended prior to August 30, 2009 are not comparable to those of New
Spectrum.
Cost Reduction Initiatives
We continually seek to improve our operational efficiency, match our manufacturing capacity and product costs to market demand and better utilize
our manufacturing resources. We have undertaken various initiatives to reduce manufacturing and operating costs.
Fiscal 2009. In connection with our announcement to reduce our headcount within each of our segments and the exit of certain facilities in the U.S.
related to the Global Pet Supplies segment, we implemented a number of cost reduction initiatives (the “Global Cost Reduction Initiatives”). These
initiatives also included consultation, legal and accounting fees related to the evaluation of our capital structure.
Fiscal 2008. In connection with our decision to exit our zinc carbon and alkaline battery manufacturing and distribution facility in Ninghai, China, we
undertook cost reduction initiatives (the “Ningbo Exit Plan”). These initiatives include fixed cost savings by integrating production equipment into our
remaining production facilities and headcount reductions.
Fiscal 2007. In connection with our announcement that we would manage our business in three vertically integrated, product−focused reporting
segments our costs related to research and development, manufacturing management, global purchasing, quality operations and inbound supply chain,
which had previously been included in our corporate reporting segment are now included in each of the operating segments on a direct as incurred basis. In
connection with these changes we undertook a number of cost reduction initiatives, primarily headcount reductions, at the corporate and operating segment
levels (the “Global Realignment Initiatives”), including a headcount reduction of approximately 200 employees.
We also implemented a series of initiatives within our Global Batteries & Personal Care business segment in Latin America to reduce operating costs
(the “Latin America Initiatives”). These initiatives include the reduction of certain manufacturing operations in Brazil and the restructuring of management,
sales, marketing and support functions. As a result, we reduced headcount in Latin America by approximately 100 employees.
Fiscal 2006. As a result of our continued concern regarding the European economy and the continued shift by consumers from branded to private
label alkaline batteries, we announced a series of initiatives in the Global Batteries & Personal Care segment in Europe to reduce operating costs and
rationalize our manufacturing structure (the “European Initiatives”). These initiatives include the reduction of certain operations at our Ellwangen, Germany
packaging center and relocating those operations to our Dischingen, Germany battery plant, transferring private label battery production at our Dischingen,
Germany battery plant to our manufacturing facility in China and restructuring the sales, marketing and support functions. As a result, we have reduced
headcount in Europe by approximately 350 employees or 24%.
Fiscal 2005. In connection with the acquisitions of United and Tetra in 2005, we announced a series of initiatives to optimize the global resources of
the combined entity. These initiatives included: integrating all of United’s home and garden business’ administrative services, sales and customer service
functions into our North America headquarters in Madison, Wisconsin; converting all of our information systems to SAP; consolidating United’s
manufacturing and distribution locations in North America; rationalizing the North America supply chain; and consolidating United’s pet supply business’
and Tetra’s administrative, manufacturing and distribution facilities. In addition, certain corporate finance functions were shifted to our global headquarters
in Atlanta, Georgia.
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