Rayovac 2003 Annual Report Download - page 16

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Page 12/13
The Company believes adjusting for unusual items in the Company’s results provides useful information regarding the Company’s
ability to service its indebtedness and facilitates investors’ and analysts’ ability to evaluate the Company’s operations excluding these
unusual items. However, the following factors should be considered in evaluating such measures: Adjusted Net Income and other
related adjusted financial measures (i) should not be considered in isolation, (ii) are not measures of performance calculated in
accordance with generally accepted accounting principles (“GAAP”), (iii) should not be construed as alternatives or substitutes for
income from operations, net income or cash flows from operating activities in analyzing the Company’s operating performance,
financial position or cash flows (in each case, as determined in accordance with GAAP) and (iv) should not be used as indicators of
the Company’s operating performance or measures of its liquidity. Additionally, because all companies do not calculate Adjusted
Net Income and related adjusted financial measures in a uniform fashion, the calculations presented herein may not be comparable
to other similarly titled measures of other companies.
All information in millions, except per-share amounts
Table 1—Adjusted Diluted Net Income Per Share
Impact of Unusual Items within the Statement of Operations: 1999 2000 2001 2002 2003
Diluted Net Income Per Share (3) $0.83 $1.32 $0.39 $0.90 $0.48
Unusual Items
Unusual items within gross profit and operating expenses, net of tax (1), (2) 0.21 — 0.48 0.26 0.73
Non-operating expense, net of tax (4) ——0.18 — 0.06
Adjusted diluted net income per share $1.04 $1.32 $1.05 $1.16 $1.27
Table 2—Adjusted Net Income
Impact of Unusual Items within the Statement of Operations: 1999 2000 2001 2002 2003
Net income (3) $24.1 $38.4 $11.5 $29.2 $15.5
Unusual Items
Unusual items within gross profit and operating expenses, net of tax (1), (2) 6.3 — 14.2 8.3 24.1
Non-operating expense, net of tax (4) —— 5.4 — 1.9
Adjusted net income $30.4 $38.4 $31.1 $37.5 $41.5
(1) The Company recorded Restructuring and related charges within gross profit and operating expenses during fiscal 1999, 2001, 2002, and 2003 reflecting: (i) the
rationalization of uneconomic manufacturing, packaging, and distribution processes, (ii) the realignment of manufacturing capacities, and (iii) restructuring of
the Company’s administrative functions. In fiscal 2003, the Company recorded retailer markdown costs of $6.2 million, as a reduction to net sales, as part of the
introduction of the Company’s new alkaline product line packaging. Please see Footnote 15 in the Notes to Consolidated Financial Statements and the Management’s
Discussion and Analysis for more information.
(2) In fiscal 2002, the Company recognized a bad debt reserve of $12.0 million, net of recoveries, attributable to the bankruptcy filing of a key customer.
(3) In fiscal 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which requires that
goodwill and intangible assets with indefinite useful lives no longer be amortized. See also Footnote 2(x) and Footnote 5 in the Notes to Consolidated Financial
Statements and the Management’s Discussion and Analysis for more information.
(4) The Company recorded non-operating expenses in fiscal 2001 and fiscal 2003 relating to the premium on the repurchase of or redemption of the Company’s senior
term notes and write-off of debt issuance costs. See Footnote 6 in the Notes to Consolidated Financial Statements and the Management’s Discussion and Analysis for
more information.
Financial Table of Contents
Rayovac Corporation and Subsidiaries
Selected Financial Data page 13
Management’s Discussion and Analysis of Financial Condition and Results of Operations page 15
Consolidated Balance Sheets page 29
Consolidated Statements of Income page 30
Consolidated Statements of Shareholders’ Equity page 31
Consolidated Statements of Cash Flows page 32
Notes to Consolidated Financial Statements page 33
Management’s Statement of Responsibility for Financial Statements page 64
Independent Auditors’ Report page 65
Market for Registrant’s Common Equity and Related Stockholder Matters page 66
Reconciliation to Generally Accepted Accounting Principles (GAAP)
Rayovac Corporation and Subsidiaries