Rayovac 2010 Annual Report Download - page 67
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Segment net sales to external customers in Fiscal 2010 were $238 million. This represents sales related to
Russell Hobbs from the date of the consummation of the Merger, June 16, 2010, through the close of Fiscal 2010.
Segment profitability in Fiscal 2010 was $13 million, which includes an increase to Cost of goods sold as a
result of the inventory write-up in conjunction with the Merger in accordance with ASC Topic 805: “Business
Combinations,” (“ASC 805”). This represents segment profit from the operations of Russell Hobbs from the date
of the consummation of the Merger, June 16, 2010 through the close of Fiscal 2010.
Segment Adjusted EBITDA in Fiscal 2010 was $90 million compared to $81 million in Fiscal 2009. The $9
million increase in Fiscal 2010 is mainly driven by Russell Hobbs’ voluntarily exiting certain non-profitable
brands and stock keeping units and implementing cost reduction initiatives.
ASC 805 requires, among other things, that assets acquired and liabilities assumed be recognized at their
fair values as of the acquisition date. Accordingly, the Company performed a valuation of the assets and
liabilities of Russell Hobbs at June 16, 2010. See Note 15, Acquisitions, of Notes to Consolidated Financial
Statements, included in this Annual Report on Form 10-K for additional information regarding the assets
acquired in the Merger. Segment assets at September 30, 2010 were $863 million. At September 30, 2010
goodwill and intangible assets recorded in connection with the Merger totaled $489 million.
Corporate Expense. Our corporate expense in Fiscal 2010 increased to $41 million from $34 million in
Fiscal 2009. Our corporate expense as a percentage of consolidated net sales in Fiscal 2010 increased slightly to
1.6% from 1.5%. The increase is primarily due to stock compensation expense of $17 million in Fiscal 2010
compared to $3 million of stock compensation expense in Fiscal 2009.
Restructuring and Related Charges. See Note 14, Restructuring and Related Charges, of Notes to
Consolidated Financial Statements, included in this Annual Report on Form 10-K for additional information
regarding our restructuring and related charges.
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