Rayovac 2003 Annual Report Download - page 60

During 2003, restructuring and related charges included in operating expenses of approximately $11,500 include amounts related
to: (i) the closure of operations at the Company’s Middleton, Wisconsin distribution center and combination with our Madison,
Wisconsin packaging facility into a new leased complex in Dixon, Illinois resulting in charges of approximately $1,400, including
termination costs of approximately $300, fixed asset impairments of approximately $300, and relocation expenses and other shut-
down related expenses of approximately $800, and (ii) a series of restructuring initiatives impacting the Company’s sales, marketing,
and administrative functions in Europe, North America, and Latin America resulting in charges of approximately $10,100, including
termination costs of approximately $7,100, distributor termination costs of approximately $900, research and development contract
termination costs of approximately $500, fixed asset impairments of $300, and legal and other expenses of approximately $1,300.
The move to the new combined distribution and packaging facility was completed in the third quarter of 2003 and the closure of
the Madison, Wisconsin and Middleton, Wisconsin facilities occurred in the fourth quarter of 2003. The sales, marketing, operations
and administrative restructuring initiatives were completed during the fourth quarter of 2003.
All activities associated with the 2003 restructuring activities have been completed, and the remaining cash payments and the
disposition of impaired assets are expected to be substantially complete by September 30, 2004.
The Company has reflected the carrying value of its Mexico City, Mexico manufacturing plant and the Company’s Madison,
Wisconsin packaging facility as assets held for sale. The carrying value of assets held for sale relating to restructuring initiatives
is $8,680 and is included in Prepaid expenses and other in the Company’s Consolidated Balance Sheet at September 30, 2003.
Termination Other
2003 Restructuring Summary Benefits Costs Total
Expense accrued $ 9,800 $15,600 $ 25,400
Expense as incurred 3,200 4,300 7,500
Cash expenditures (9,800) (4,500) (14,300)
Non cash charges — (9,400) (9,400)
Balance September 30, 2003 $ 3,200 $ 6,000 $ 9,200
(16) ACQUISITIONS AND DIVESTITURES
In 2002, the Company entered into agreements with a Hong Kong company for the cordless product line and licensing agreements
on other product lines not currently sold by the Company. The Company received promissory notes in the amount of $800 payable
over terms of up to five years. The Company will receive variable royalties on sales of product lines licensed. As a result of these
transactions, the Company recognized a pretax gain of $701.
On October 1, 2002, the Company acquired substantially all of the consumer battery business of VARTA AG. The acquisition con-
sisted of the purchase of all of VARTA AG’s consumer battery subsidiaries and business outside of Germany, excluding Brazil, and a
controlling ownership and management interest in a new joint venture entity that will operate the VARTA AG consumer battery
business in Germany. The residual interest in the joint venture is held by VARTA AG. With the acquisition of VARTA, the Company
became a truly global battery manufacturer and marketer and acquired additional low-cost manufacturing capacity and battery
technology. As a result of the acquisition of the VARTA AG consumer battery business, the Company is now selling in more than
100 countries and is one of the largest consumer battery companies in the world.
The results of VARTA’s operations, since the acquisition on October 1, 2002, are included in the Company’s Statement of Operations
for the year ended September 30, 2003.
Notes to Consolidated Financial Statements
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)
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