Rayovac 2015 Annual Report Download - page 66

Small appliance sales decreased $9.5 million, or 1.3%, during the year ended September 30, 2014 compared
to the previous year. Excluding the negative exchange impact of $5.0 million, small appliances decreased
$4.5 million. Excluding foreign exchange impacts, North American sales declined $20.2 million, which was
tempered by gains in Europe and Latin America of $13.5 million and $2.2 million, respectively. The North
American sales declines were due to our exit of low-margin promotions during the year ended September 30,
2014. The European and Latin American sales gains were attributable to promotions with existing retailers,
coupled with innovative new product launches.
Personal care sales increased $10.4 million, or 1.9%, during the year ended September 30, 2014 compared
to the previous year. Excluding the negative impact of foreign currency of $1.7 million, sales increased
$12.1 million. The constant currency increase was attributable to European sales increases of $7.6 million and
Latin America sales increases of $6.5 million, offset by a $2.1 million decline in North American sales. The
gains in Europe were due to innovative new product launches, promotional activities and expansion into new
channels. Latin America sales gains were attributable to volume expansion in Colombia, successful hair care
accessories product launches throughout Central America, distribution gains in Brazil and increased promotional
activities. The decrease in North America was due to the non-recurrence of promotions during the first quarter of
the year ended September 30, 2013 and customer inventory management, offset by North American sales of
innovative new products and successful promotions.
Hardware and home improvement sales increased $296.4 million, or 34.1%, during the year ended
September 30, 2014 compared to the previous year. On a proforma basis, as if the acquisition of the HHI
Business had occurred at the beginning of the year ended September 30, 2013, hardware and home improvement
sales increased approximately $104.8 million, or 9.8%, to $1,166.0 million for the year ended September 30,
2014 versus $1,061.2 million in the year ended September 30, 2013. This increase was attributable to the
residential security category which accounted for $90.7 million of the increase due to strong retail positioning in
North America coupled with the continued recovery of the U.S. housing market. The plumbing category
increased $16.7 million while the hardware product category decreased $2.6 million. The plumbing product
category increased due to growth in the U.S. from both retail and non-retail channels. Also contributing to the
increase in sales was the TLM Business acquisition, as prior year results did not include the TLM Business until
April 8, 2013.
Pet supply sales decreased $21.4 million, or 3.4%, during the year ended September 30, 2014 compared to
the previous year, including a positive foreign currency exchange impact of $1.3 million. Excluding foreign
exchange impacts, aquatic sales and companion animal sales decreased $18.6 million and $4.1 million,
respectively. The decline in aquatic sales was driven by lower kit and equipment sales in North America and
lower aquatic food sales internationally coupled with a one-time negative impact from product registration issues
in Russia during the third and fourth quarters of the year ended September 30, 2014. The decline in companion
animal sales was driven by adverse weather in North America, which negatively affected retail store traffic
during the second quarter of the year ended September 30, 2014, and the non-recurrence of companion animal
promotions that took place during the first quarter of the year ended September 30, 2013.
Home and garden sales increased $41.4 million, or 10.6%, during the year ended September 30, 2014
compared to the previous year. The increase in sales was attributable to increases in repellent product sales and
lawn and garden control sales of $22.6 million and $20.2 million, respectively. The repellent product sales
increase was driven by market share gains, the extended selling season due to favorable weather and a
$12.6 million increase due to the Liquid Fence acquisition. The increase in lawn and garden control sales was
primarily driven by distribution gains at key retailers and the extended selling season discussed above. These
gains were partially offset by a slight decline in household insect control sales of $1.5 million.
Gross Profit.Gross profit and gross profit margin for the year ended September 30, 2014 was
$1,568.9 million and 35.4%, respectively, compared to $1,390.3 million and 34.0%, respectively, for the year
ended September 30, 2013. The increase in gross profit and improvement in gross profit margin was primarily
52