Rayovac 2005 Annual Report Download - page 99

equipment, inventory and intangibles. The purchase
price allocation for the United acquisition will be
fi nalized upon the fi nal valuation of certain assets
and liabilities pursuant to the Company’s exit plan.
The purchase price allocation for Microlite has been
fi nalized. Future allocations of the Tetra and United
purchase prices may impact the amount and
segment allocation of goodwill.
The amortization expense for 2005, 2004 and
2003 is as follows:
2005 2004 2003
Proprietary technology amortization $ 2,449 $736 $243
Customer list amortization 9,693 219 195
Trade names amortization 1,886 – –
$14,028 $955 $438
The Company estimates annual amortization
expense for the next fi ve fi scal years will approximate
$23,000 per year.
(6) Debt
Debt consists of the following:
September 30,
2005 2004
Amount Rate(A) Amount Rate(A)
Senior Subordinated Notes,
due February 1, 2015 $ 700,000 7.4% $ – –
Senior Subordinated Notes,
due October 1, 2013 350,000 8.5% 350,000 8.5%
Term Loan, US Dollar,
expiring February 6, 2012 651,725 5.8% – –
Term Loan, Canadian Dollar,
expiring February 6, 2012 74,081 4.9% – –
Term Loan, Euro, expiring
February 6, 2012 137,142 4.7% – –
Term Loan, Euro Tranche B,
expiring February 6, 2012 338,288 4.4% – –
Term C Loan, expiring
September 30, 2009 – – 257,000 4.2%
Euro Term C Loan, expiring
September 30, 2009 – – 141,845 5.1%
Revolving Credit Facility,
expiring February 6, 2011 – – – –
Revolving Credit Facility,
expiring September 30, 2008 – – 37,000 5.7%
Euro Revolving Credit Facility,
expiring February 6, 2011 – – – –
Other notes and obligations 38,701 – 20,530 –
Capitalized lease obligations 17,396 – 23,522 –
2,307,333 829,897
Less current maturities 39,308 23,895
Long-term debt $2,268,025 $806,002
(A) Interest rates on senior credit facilities represent the weighted average rates
on balances outstanding.
On February 7, 2005, the Company completed
its acquisition of United. In connection with that
acquisition, the Company completed its offering of
$700,000 aggregate principal amount of its 73
/8%
Senior Subordinated Notes due 2015 and its tender
offer for United’s 97
/8% Senior Subordinated Notes
due 2009, retired United’s senior credit facilities and
replaced the Company’s Senior Credit Facilities with
new Senior Credit Facilities. At the time of the refi -
nancing, the outstanding amount of the Revolving
Credit Facility was $34,000, the outstanding amount
of the Euro denominated Term C Loan was $132,738,
and the outstanding amount of the U.S. Term C
Loan was $241,344. Additionally, in connection with
the refi nancing the Company assumed $10,205
of United’s senior subordinated notes which were
subsequently repurchased on April 1, 2005. The
Company also assumed $3,441 of United’s capital
leases in connection with the acquisition. In con-
nection with the refi nancing and the issuance of
the new Senior Subordinated Notes, the Company
incurred approximately $28,000 in new debt issu-
ance costs, which are being amortized over the life
of the debt using the effective interest method. In
addition, the Company expensed approximately
$12,000 in remaining debt issuance costs asso-
ciated with the old Senior Credit Facilities. This
amount is included in Interest expense in the
Consolidated Statement of Operations.
On April 29, 2005, the Company acquired all of
the outstanding equity interests of Tetra Holding
GmbH (“Tetra”) for a purchase price of approximately
$550,000, net of cash acquired and inclusive of a
fi nal working capital payment of $2,400, made in
July 2005. The acquisition utilized $500,000 of an
incremental Term Loan Facility and approximately
$53,000 of the Revolving Credit Facility (see Note 16,
Acquisitions, where the Tetra acquisition is further
described). The Incremental Term Loan Facility was
denominated in a $115,000 addition to the existing
U.S. Dollar Term Loan, a CAD $24,830 addition
(USD $20,000 at April 29, 2005) to the existing
CAD Term Loan and a Tranche B
€ 281,202 Term
Loan (USD $365,000 at April 29, 2005). The Fourth
Amended and Restated Credit Agreement was
amended (the “First Amendment”) to refl ect utiliza-
tion of the incremental Term Facility. The payment
provisions of the respective increments to the Term
Loan Facility are the same as the existing term
loans in the respective currency denominations.
In connection with the acquisition of Tetra and the
issuance of the incremental Term Loan Facility, the
2005 Form 10-K Annual Report
Spectrum Brands, Inc.
2005 ANNUAL REPORT 79