Rayovac 2004 Annual Report Download - page 97

RAYOVAC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
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. In November 2004, the Company
completed the sale of its Mexico City, Mexico manufacturing plant. The value of these facilities at September 30,
2004 is approximately $8,300 and is included in Prepaid expenses and other in the Consolidated Balance Sheets.
All activities associated with the 2003 restructuring activities have been completed, and the remaining cash
payments and the disposition of impaired assets are substantially complete at September 30, 2004.
2003 Restructuring Initiatives Summary
Termination
Benefits
Other
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
Change in estimate ............................ (700) (1,700) (2,400)
Cash expenditures ............................. (2,200) (1,200) (3,400)
Non cash charges ............................. — (3,000) (3,000)
Accrual Balance at September 30, 2004 ............ $ 300 $ 100 $ 400
2002 Restructuring and Related Charges
During 2002, Cost of goods sold include restructuring and related charges of approximately $1,200 related
to: (i) the closure of the Company’s Santo Domingo, Dominican Republic plant and transfer of production to the
Company’s Guatemala City, Guatemala manufacturing facility, and (ii) outsourcing a portion of the Company’s
zinc carbon battery production previously manufactured at its Mexico City, Mexico manufacturing facility. The
amount recorded includes approximately $1,200 of employee termination benefits for approximately 115
manufacturing employees, approximately $900 of charges from the abandonment of equipment and inventory,
net of a change in estimate of approximately $400 associated with the closing of the manufacturing facility, and
approximately $300 of other expenses. The change in estimate reflected the Company’s ability to utilize more
inventory and manufacturing equipment at the Company’s Guatemala City, Guatemala manufacturing location
than the Company originally anticipated. All activities associated with the 2002 restructuring activities have been
completed. During 2002, the Company also recognized the benefit of changes in estimates of $1,200 associated
with the completion of 2001 initiatives.
(16) Acquisitions
On May 28, 2004, the Company completed the acquisition of 90.1% of the outstanding capital stock, including
all voting stock, of Microlite, a Brazilian battery company, from VARTA AG of Germany and Tabriza Brasil
Empreendimentos Ltda. of Brazil. Microlite operates two battery-manufacturing facilities in Recife, Brazil and
has several sales and distribution centers distribution centers located throughout Brazil. Microlite manufactures
and sells both alkaline and zinc carbon batteries as well as battery-operated lighting products. Microlite has
operated as an independent company since 1982. The acquisition of Microlite consolidates the Company’s rights
to the Rayovac brand name in Latin America.
The results of Microlite’s operations since the acquisition are included in the Company’s Consolidated
Statement of Operations for the year ended September 30, 2004. The financial results of the Microlite acquisition
are reported as part of the Latin America segment. Microlite contributed $12,800 in net sales, and recorded an
operating loss of $1,400 in the current year.
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