Rayovac 2010 Annual Report Download - page 53

products, electric shavers and accessories, grooming products and hair care appliances. With the addition of
Russell Hobbs we design, market and distribute a broad range of branded small household appliances and
personal care products. Our manufacturing and product development facilities are located in the United States,
Europe, Latin America and Asia. Substantially all of our rechargeable batteries and chargers, shaving and
grooming products, small household appliances, personal care products and portable lighting products are
manufactured by third-party suppliers, primarily located in Asia.
We sell our products in approximately 120 countries through a variety of trade channels, including retailers,
wholesalers and distributors, hearing aid professionals, industrial distributors and original equipment
manufacturers (“OEMs”) and enjoy strong name recognition in our markets under the Rayovac, VARTA and
Remington brands, each of which has been in existence for more than 80 years, and under the Tetra, 8-in-1,
Spectracide, Cutter, Black & Decker, George Foreman, Russell Hobbs, Farberware and various other brands.
Global and geographic strategic initiatives and financial objectives are determined at the corporate level.
Each business segment is responsible for implementing defined strategic initiatives and achieving certain
financial objectives and has a general manager responsible for sales and marketing initiatives and the financial
results for all product lines within that business segment.
Our operating performance is influenced by a number of factors including: general economic conditions;
foreign exchange fluctuations; trends in consumer markets; consumer confidence and preferences; our overall
product line mix, including pricing and gross margin, which vary by product line and geographic market; pricing
of certain raw materials and commodities; energy and fuel prices; and our general competitive position,
especially as impacted by our competitors’ advertising and promotional activities and pricing strategies.
During the second quarter of Fiscal 2008, we determined that in view of the difficulty in predicting the
timing or probability of a sale of the remaining U.S. portion of the Home and Garden Business, the requirements
of Generally Accepted Accounting Principles (“GAAP”) necessary to classify the remaining U.S. portion of the
Home and Garden Business as discontinued operations were no longer met and that it was appropriate to present
the remaining U.S. portion of the Home and Garden Business as held and used in the Company’s continuing
operations as of our second quarter of Fiscal 2008 and going forward. The presentation herein of the results of
continuing operations includes the Home and Garden Business excluding the Canadian division, which was sold
on November 1, 2007, for all periods presented.
In the third quarter of Fiscal 2008, we entered into a definitive agreement, subject to the consent of our
lenders under our senior credit facilities, to sell the assets related to Global Pet Supplies. We were unable to
obtain the consent of the lenders, and on July 13, 2008, we entered into a termination agreement regarding the
agreement to sell the assets related to Global Pet Supplies. Pursuant to the termination agreement, as a condition
to the termination, we paid the proposed buyer $3 million as a reimbursement of expenses.
In November 2008, our board of directors committed to the shutdown of the growing products portion of the
Home and Garden Business, which includes the manufacturing and marketing of fertilizers, enriched soils, mulch
and grass seed, following an evaluation of the historical lack of profitability and the projected input costs and
significant working capital demands for the growing products portion of the Home and Garden Business for
Fiscal 2009. We believe the shutdown was consistent with what we have done in other areas of our business to
eliminate unprofitable products from our portfolio. As of March 29, 2009, we completed the shutdown of the
growing products portion of the Home and Garden Business. Accordingly, the presentation herein of the results
of continuing operations excludes the growing products portion of the Home and Garden Business for all periods
presented. See Note 9, Discontinued Operations, to our Consolidated Financial Statements included in this
Annual Report on Form 10-K for further details on the disposal of the growing products portion of the Home and
Garden Business.
On December 15, 2008, we were advised that our common stock would be suspended from trading on the
NYSE prior to the opening of the market on December 22, 2008. We were advised that the decision to suspend
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