Rayovac 2010 Annual Report Download - page 108

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(1) Description of Business
Spectrum Brands Holdings, Inc., a Delaware corporation (“SB Holdings” or the “Company”), is a global branded
consumer products company and was created in connection with the combination of Spectrum Brands, Inc.
(“Spectrum Brands”), a global branded consumer products company, and Russell Hobbs, Inc. (“Russell Hobbs”),
a global branded small appliance company, to form a new combined company (the “Merger”). The Merger was
consummated on June 16, 2010. As a result of the Merger, both Spectrum Brands and Russell Hobbs are wholly-
owned subsidiaries of SB Holdings and Russell Hobbs is a wholly-owned subsidiary of Spectrum Brands. SB
Holdings trades on the New York Stock Exchange under the symbol “SPB.”
In connection with the Merger, Spectrum Brands refinanced its existing senior debt and a portion of Russell
Hobbs’ existing senior debt through a combination of a new $750,000 United States (“U.S.”) Dollar Term Loan
due June 16, 2016, new $750,000 9.5% Senior Secured Notes maturing June 15, 2018 and a new $300,000 ABL
revolving facility due June 16, 2014. (See also Note 7, Debt, for a more complete discussion of the Company’s
outstanding debt.)
On February 3, 2009, Spectrum Brands, at the time a Wisconsin corporation, and each of its wholly owned
U.S. subsidiaries (collectively, the “Debtors”) filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy
Code (the “Bankruptcy Code”), in the U.S. Bankruptcy Court for the Western District of Texas (the “Bankruptcy
Court”). On August 28, 2009 (the “Effective Date”), the Debtors emerged from Chapter 11 of the Bankruptcy
Code. As of the Effective Date and pursuant to the Debtors’ confirmed plan of reorganization, Spectrum Brands
converted from a Wisconsin corporation to a Delaware corporation.
Unless the context indicates otherwise, the term “Company” is used to refer to both Spectrum Brands and its
subsidiaries prior to the Merger and SB Holdings and its subsidiaries subsequent to the Merger. The term
“Predecessor Company” refers only to the Company prior to the Effective Date and the term “Successor
Company” refers to the Company subsequent to the Effective Date. The Company’s fiscal year ends
September 30. References herein to Fiscal 2010, Fiscal 2009 and Fiscal 2008 refer to the fiscal years ended
September 30, 2010, 2009 and 2008, respectively.
Prior to and including August 30, 2009, all operations of the business resulted from the operations of the
Predecessor Company. In accordance with ASC Topic 852: “Reorganizations,” (“ASC 852”) the Company
determined that all conditions required for the adoption of fresh-start reporting were met upon emergence from
Chapter 11 of the Bankruptcy Code on the Effective Date. However in light of the proximity of that date to the
Company’s August accounting period close, which was August 30, 2009, the Company elected to adopt a
convenience date of August 30, 2009, (the “Fresh-Start Adoption Date”) for recording fresh-start reporting. The
Company analyzed the transactions that occurred during the two-day period from August 29, 2009, the day after
the Effective Date, and August 30, 2009, the Fresh-Start Adoption Date, and concluded that such transactions
represented less than one-percent of the total net sales during Fiscal 2009. As a result, the Company determined
that August 30, 2009 would be an appropriate Fresh-Start Adoption Date to coincide with the Company’s normal
financial period close for the month of August 2009. As a result, the fair value of the Predecessor Company’s
assets and liabilities became the new basis for the Successor Company’s Consolidated Statement of Financial
Position as of the Fresh-Start Adoption Date, and all operations beginning August 31, 2009 are related to the
Successor Company. Financial information of the Company’s financial statements prepared for the Predecessor
Company will not be comparable to financial information for the Successor Company. The Company is a global
branded consumer products company with positions in seven major product categories: consumer batteries; small
appliances; pet supplies; electric shaving and grooming; electric personal care; portable lighting; and home and
garden control.
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