Rayovac 2005 Annual Report Download - page 114

2004 Restructuring and Related Charges
In 2004, in connection with the September 2003
acquisition of Remington, 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 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, Connect-
icut 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 distri-
bution centers; and moving the Company’s corporate
headquarters to Atlanta, Georgia. The Company also
announced the integration of its sales and market-
ing organizations throughout continental Europe. The
following table summarizes the remaining accrual
balance associated with the 2004 initiatives and
activity that occurred during fi scal 2005:
2004 Restructuring Initiatives Summary
Termination Other
Benefits Costs Total
Accrual balance at
September 30, 2004 $2,835 $ 1,040 $ 3,875
Cash expenditures (2,010) (770) (2,780)
Non-cash expenditures – (177) (177)
Accrual balance
at September 30, 2005 $ 825 $ 93 $ 918
Expensed as incurred $ – $(1,259) $(1,259)
All activities associated with the 2004 restructur-
ing initiatives have been completed, and the remain-
ing cash payments and the disposition of assets
held for sale will be substantially completed in fi scal
2006.
2003 Restructuring and Related Charges
During 2003, Cost of goods sold includes restruc-
turing and related charges of approximately $21,100
related to: (i) the closure in October 2002 of the
Company’s Mexico City, Mexico plant and integration
of production into the Company’s Guatemala City,
Guatemala manufacturing location, resulting in
charges of approximately $6,200, including termina-
tion payments of approximately $1,400, fi xed asset
and inventory impairments of approximately $4,300,
and other shutdown related expenses of approxi-
mately $500, (ii) the closure of operations at the
Company’s Madison, Wisconsin packaging facility
and combination with the Company’s Middleton,
Wisconsin distribution center into a new leased
complex in Dixon, Illinois resulting in charges of
approximately $12,400, including termination costs
of approximately $2,400 and non cash pension cur-
tailment costs of approximately $700, fi xed asset
and inventory impairments of approximately $6,900,
and relocation expenses and other shutdown related
expenses of approximately $2,400, (iii) a series of
restructuring initiatives impacting the Company’s
manufacturing functions in Europe, North America,
and Latin America resulting in charges of approxi-
mately $2,800, including termination benefi ts of
approximately $1,800 and inventory and asset
impairments of approximately $1,000, and (iv) a
reduction of approximately $300 related to a revi-
sion of 2001 restructuring initiative estimates for
the anticipated costs to close its Wonewoc,
Wisconsin facility.
During 2003, Operating expenses include restruc-
turing and related charges of approximately $11,500
related to: (i) the closure of operations at the Com-
pany’s Middleton, Wisconsin distribution center and
combination with the Company’s 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, fi xed asset impairments of approximately
$300, and relocation expenses and other shutdown
related expenses of approximately $800, and (ii) a
series of restructuring initiatives impacting the Com-
pany’s sales, marketing, and administrative func-
tions 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, fi xed asset impair-
ments 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, opera-
tions and administrative restructuring initiatives
were completed during the fourth quarter of 2003.
2005 Form 10-K Annual Report
Spectrum Brands, Inc.
SPECTRUM BRANDS, INC.94