Rayovac 2004 Annual Report Download - page 95

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RAYOVAC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
The Company reports restructuring and related charges relating to administrative functions in Operating
expenses, such as initiatives impacting sales, marketing, distribution, or other non-manufacturing related
functions. Restructuring and related charges reflected in Operating expenses include, but are not limited to,
termination and related costs, any asset impairments relating to the functional areas described above, and other
costs directly related to the initiatives implemented. Restructuring and related charges are not reflected in the
segment disclosures included in Note 12, Segment Information.
Restructuring and Related Charges Summary
2004 2003 2002
Cost of goods sold:
North America ........................................... $ (800) $12,500 $ —
Europe/ROW ............................................ — 2,300 —
Latin America ............................................ — 6,300 1,200
Total restructuring and related charges in cost of goods sold ....... (800) 21,100 1,200
Operating expense:
North America ........................................... 9,600 7,700 —
Europe/ROW ............................................ 2,600 2,300 —
Latin America ............................................ — 1,500 —
Total restructuring and related charges in operating expense ....... 12,200 11,500 —
Total restructuring and related charges ........................ $11,400 $32,600 $1,200
2004 Restructuring and Related Charges
On January 13, 2004, the Company committed to and announced a series of initiatives to position itself for
future growth opportunities and to optimize the global resources of the combined Remington and Rayovac
companies. These initiatives include: integrating all of Remington’s North America administrative services,
marketing, sales, and customer service functions into the Company’s North America headquarters in Madison,
Wisconsin; moving Remington’s Bridgeport, Connecticut manufacturing operations to the Company’s Portage,
Wisconsin manufacturing location; creation of a global product development group in the Company’s technology
center in Madison, Wisconsin; closing Remington’s Service Centers in the United States and the United
Kingdom; consolidating distribution centers; and moving the Company’s corporate headquarters to Atlanta,
Georgia. The Company also announced the integration of its sales and marketing organizations throughout
continental Europe.
During 2004, Cost of goods sold include restructuring and related charges of approximately $800 of income
related to changes in estimate of approximately $1,100 for the reduction of previously established inventory
obsolescence estimates associated with 2003 restructuring initiatives, offset by charges of approximately $300
related to North American inventory impairments associated with the combination of Remington Rayovac
distribution facilities.
During 2004, operating expenses include restructuring and related charges of approximately $12,200 related
to: (i) North America restructuring initiatives primarily related to termination benefits of approximately $4,900
associated with Remington integration initiatives, (ii) approximately $300 associated with the combination of
Remington and Rayovac distribution facilities, (iii) pre-acquisition executive compensation agreements with
certain Remington employees of approximately $2,000, (iv) Europe/ROW fixed asset impairments and
termination benefits of approximately $3,300 associated with Remington integration initiatives, (v) relocation
and recruiting expenses of approximately $3,000 primarily associated with the move to the Company’s new
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