Rayovac 2002 Annual Report Download - page 60

46
47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)
Expenditures for segment assets
2000 2001 2002
North America $ 14,668 $ 17,521 $ 13,158
Latin America 3,448 1,761 1,514
Europe/ROW 880 411 969
Total segments $ 18,996 $ 19,693 $ 15,641
Product Line Revenues
2000 2001 2002
Alkaline $280,700 $302,900 $295,700
Heavy Duty 142,300 139,100 96,500
Rechargeables 29,700 29,800 31,800
Hearing Aid batteries 60,800 65,300 67,600
Specialty batteries 41,400 17,800 15,300
Lighting products and Lantern batteries 76,000 61,300 65,800
Total revenues from external customers $630,900 $616,200 $572,700
(13) Commitments and Contingencies
In March 1998, the Company entered into an agreement to purchase certain equipment and to pay annual royalties. In connection with this 1998
agreement, the Company committed to pay royalties of $2,000 in 1999, $3,000 in 2000 through 2002, and $500 in each year thereafter, as long as
the related equipment patents are enforceable (until 2022). The Company incurred royalty expenses of $2,250 for 2000, $3,000 for 2001, and $3,000
for 2002.
The Company has provided for the estimated costs associated with environmental remediation activities at some of its current and former manufactur-
ing sites. In addition, the Company, together with other parties, has been designated a potentially responsible party of various third-party sites on the
United States EPA National Priorities List (Superfund). The Company provides for the estimated costs of investigation and remediation of these sites
when such losses are probable and the amounts can be reasonably estimated. The actual cost incurred may vary from these estimates due to the inherent
uncertainties involved. The Company believes that any additional liability in excess of the amounts provided of $1,640, which may result from resolu-
tion of these matters, will not have a material adverse effect on the financial condition, liquidity, or cash flow of the Company.
The Company has certain other contingent liabilities with respect to litigation, claims and contractual agreements arising in the ordinary course of business.
Such litigation includes the suit filed against the Company by Eveready Battery Company and shareholder lawsuits. In the opinion of management, such
contingent liabilities are not likely to have a material adverse effect on the financial condition, liquidity or cash flow of the Company.
(14) Related Party Transactions
The Company and Thomas H. Lee Company (THL Co.) were parties to a Management Agreement pursuant to which the Company engaged THL Co.
to provide consulting and management advisory services for an initial period of five years through September 2001. The agreement was renewed for
another year through 2002. The agreement was not renewed upon expiration in September 2002. The Company paid THL Co. aggregate fees and
expenses of $458, $473 and $364 for 2000, 2001 and 2002, respectively.
The Company has notes receivable from officers/shareholders in the amount of $3,665 and $4,205 at September 30, 2001 and 2002, respectively, gen-
erally payable in fiscal 2003 through fiscal 2005, which bear interest at 4.6% to 8.0%. Since the officers utilized the proceeds of the notes to purchase
common stock of the Company, directly or through the exercise of stock options, the notes have been recorded as a reduction of shareholders’ equity.