Rayovac 2005 Annual Report Download - page 7

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A BRAND NEW, 100-YEAR-OLD COMPANY
Spectrum Brands enters fi scal 2006 as a brand new,
100-year-old company -- a powerful enterprise that is a
much larger, stronger, more diversifi ed competitor in the
global consumer products industry. We are confi dent
about the continued strength of our growth platform,
which encompasses leadership positions in high-growth
categories, an array of appealing products, a portfolio
of world-class brands, strong global retailer relation-
ships, a powerful global infrastructure, and a proven
management team.
However, we recognize there are challenges ahead.
In the coming year, we anticipate continuing pressure
from both a slow-growth European economy and from
rising fuel and raw materials costs. To overcome these
challenges and to advance toward our long-range goals,
we will continue to capitalize on and strengthen our
brands, expand our distribution, and reduce costs across
all areas of our business. We will focus on:
• Growing our revenues organically. We are well posi-
tioned to compete in the high-growth categories of
specialty pet supplies, lawn and garden, household
insect control, and shaving and grooming and personal
care. Our positions in these fi ve exciting new catego-
ries afford us the opportunity to deliver attractive
revenue and earnings growth.
• Achieving signifi cant synergy savings. We plan to
complete the integration of United Industries and
Tetra as swiftly as possible, including rationalizing our
physical plant, consolidating our manufacturing and
purchasing activities, regionally centralizing distribu-
tion, and migrating all of our information technology
systems to our SAP platform. We are driving these
efforts with the goal of reducing costs by an annual-
ized $100 million.
• Deleveraging our balance sheet. While prudently
accessing the capital markets was essential to create
our new business model, lowering debt levels is now
a key priority for our management team. We have a
successful history of reducing leverage after acquisi-
tions, and we will remain sharply focused on achieving
this goal over the next several years. Free cash fl ow
from operations will be substantially dedicated to debt
reduction, as will approximately $85 million in antici-
pated proceeds from the divestiture of non-core assets.
As Spectrum Brands moves into our next millennium,
we will strive to deliver increased shareholder value by
operating at our customary high standard of excellence.
We believe that with the continued support of our
employees, shareholders and customers, we will real-
ize the full potential of our powerful new enterprise and
continue to grow the business successfully, as we have
throughout its 100-year history.
David A. Jones
Chairman and Chief Executive Offi cer
Kent J. Hussey
President and Chief Operating Offi cer
2005 ANNUAL REPORT 5