Rayovac 2005 Annual Report Download - page 113

As part of this reorganization, Spectrum’s and
United’s sales management, fi eld sales operations
and marketing teams (including customer teams
located in Atlanta, Bentonville, and Charlotte) were
merged into a single North American sales and mar-
keting organization reporting to Spectrum’s North
American management team located in Madison,
Wisconsin. United’s fi nance, information services,
customer service and other administrative functions
were combined with existing counterpart organiza-
tions in Madison. Legal and certain corporate
accounting functions were combined directly into
Spectrum’s global headquarters in Atlanta. Canadian
Consumer Product sales and marketing teams have
been merged as well and report to a single country
manager based in Toronto. Purchasing and sourcing
have been completely integrated on a global basis,
with an expanded product sourcing offi ce in Asia
serving all parts of the Company. In addition, as the
Company begins to optimize its global pet opera-
tions, two pet supplies facilities in Brea, California
and Hazleton, California were closed in 2005 as part
of the restructuring plan for United.
The Company recorded $17,492 million of pretax
restructuring and related charges in 2005 in connec-
tion with its integration of United’s lawn and garden
and pet operations. Cash costs of these integration
initiatives incurred in 2005 were $5,345. The remain-
ing $12,147 of costs incurred relate primarily to
stay pay arrangements which are being accrued over
the retention period and will be paid primarily in the
fi rst half of fi scal 2006.
In addition, the Company recorded various other
restructuring and related charge accrual reversals in
operating expenses including a $1,082 reduction of
an existing environmental accrual for Remington’s
Bridgeport, Connecticut facility. This accrual was
originally established in purchase accounting as an
adjustment to goodwill.
The following table summarizes all restructuring
and related charges the Company incurred in 2005:
Costs included in cost of sales:
Breitenbach, France facility closure:
Termination benefits $ 8,276
Other associated costs 1,965
United integration:
Termination benefits 255
Total included in cost of sales $10,496
Costs included in operating expenses:
United integration:
Termination benefits $12,742
Other associated costs 4,495
Other initiatives:
Termination benefits $ 194
Other associated costs (1,611)
Total included in operating expenses $15,820
Total restructuring and related charges $26,316
The Company’s integration activities related to
the United and Tetra acquisitions are ongoing and
are expected to continue into 2007. Total costs
associated with integration efforts are expected to
total approximately $75,000, of which approximately
$45,000 will be cash costs and $30,000 will be
non-cash. In fi scal 2006, the Company expects to
incur approximately $35,000 to $40,000 of costs
associated with the integration, which includes
approximately $20,000 to $25,000 of cash costs.
The following table summarizes the remaining
accrual balance associated with the 2005 initiatives
and activity that occurred during fi scal 2005:
2005 Restructuring Initiatives Summary
Termination Other
Benefits Costs Total
Accrual balance at
September 30, 2004 $ – $ – $ –
Provisions 20,312 282 20,594
Cash expenditures (4,338) (196) (4,534)
Accrual balance at
September 30, 2005 $15,974 $ 86 $16,060
Expensed as incurred $ 900 $6,178 $ 7,078
2005 Form 10-K Annual Report
Spectrum Brands, Inc.
2005 ANNUAL REPORT 93