Rayovac 2006 Annual Report Download
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Fact: In the U.S. alone, there are 73 million pet dogs.
Table of contents
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2006 Annual Report Fact: In the U.S. alone, there are 73 million pet dogs. -
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... more than one million retail stores in more than 120 countries around the world. Headquartered in Atlanta, we have approximately 8,400 employees worldwide. Spectrum Brands' shares trade on the New York Stock Exchange under the symbol SPC. Spectrum Brands' Product Portfolio Personal Care 6% Shaving... -
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... women in Europe and North America wake up every morning and style their hair. Rayovac Alkaline Batteries perform just as well as the leading competitors, but cost 25 percent less at retail. Spectrum Brands products can be purchased at 1.5 million retail stores in more than 120 countries on four... -
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...big picture. David A. Jones Chairman and Chief Executive Ofï¬cer Kent J. Hussey Vice Chairman The facts you have just read, for example, remind us that there is a large and growing market for our products; our brands enjoy solid market positions; and the distribution infrastructure supporting our... -
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...ve quarters. Our Latin American business, where the Rayovac brand enjoys a strong number one market position, also was an important contributor to this improved performance. Europe remains the real challenge for us in the battery category. On the private-label side, pricing pressures, combined with... -
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... Design Works USA. Remington is the model for our strategy of acquiring strong brands in growth categories, then deploying our global technology, supply chain and marketing platforms to expand distribution and grow market share. This strategy was top-of-mind when we acquired United and Tetra in 2005... -
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...product development during 2007 in order to grow market share and strengthen our brands. • Managing the cost side of our business, where we anticipate price increases in many raw materials, including zinc, copper and nickel - all critical components in the manufacture of batteries. Selective price... -
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... alkaline, zinc carbon, hearing aid, rechargeable batteries and chargers and other specialty batteries marketed under the Rayovac brand in North America and Latin America and the VARTA brand in Europe. P ORTABLE LIGHTING The Rayovac and VARTA brands offer a broad line of ï¬,ashlights, lanterns and... -
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...birds and other small domestic animals - including treats, stain and odor removal products, health and grooming aids, and bedding. Spectrum's pet supplies are distributed broadly throughout North America, Europe and Japan. In the aquatics category, Tetra is the global premium brand name. Other major... -
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...) Executive Ofï¬cers David A. Jones Chairman and Chief Executive Ofï¬cer Kent J. Hussey Vice Chairman Randall J. Steward Executive Vice President and Chief Financial Ofï¬cer David R. Lumley President, Global Batteries & Personal Care, President, Home & Garden and Co-Chief Operating Ofï¬cer John... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Reconciliation to Generally Accepted Accounting Principles (GAAP) Spectrum Brands, Inc. and Subsidiaries The Company believes adjusting for unusual items in the Company's results provides useful information regarding the Company's ... -
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... 3300, Atlanta, Georgia (Address of principal executive ofï¬ces) 30328 (Zip Code) Registrant's telephone number, including area code: (770) 829-6200 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on which registered Title of each class Common Stock, Par Value... -
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... An n u al R ep ort Spectrum Brands, Inc. TABLE OF CONTENTS PART I ITEM 1. ITEM 1A. ITEM 1B. ITEM 2. ITEM 3. ITEM 4. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERS' PURCHASES OF EQUITY SECURITIES ...19 ITEM 6. ITEM 7. SELECTED FINANCIAL DATA ...21... -
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... a variety of trade channels, including retailers, wholesalers and distributors, hearing aid professionals, industrial distributors and original equipment manufacturers ("OEMs"). We enjoy strong name recognition in our markets under the Rayovac, VARTA and Remington brands, each of which has been in... -
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...and private labels, including Beltone, Miracle Ear, Siemens and Starkey. We also sell Nickel Metal Hydride (NiMH) rechargeable batteries and a variety of battery chargers under the Rayovac and VARTA brands. Our other specialty battery products include photo batteries, lithium batteries, silver oxide... -
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... irons and hair-setters. Portable Lighting We offer a broad line of battery-powered lighting products, including ï¬,ashlights, lanterns and other portable devices, for both retail and industrial markets. We sell our portable lighting products under both the Rayovac and VARTA brand names, under other... -
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...retail markets, we compete for limited shelf space and consumer acceptance. Factors inï¬,uencing product sales are brand name recognition, perceived quality, price, performance, product packaging and design innovation, as well as creative marketing, promotion and distribution strategies. The battery... -
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... other premium brands. In Latin America, where zinc carbon batteries outsell alkaline batteries, the Rayovac brand is competitively priced. The pet supply industry is highly fragmented with over 500 manufacturers in the U.S., consisting primarily of small companies with limited product lines. Our... -
Page 19
... or ï¬nancial condition. Electronic and electrical products that we sell in Europe, particularly products sold under the Remington brand name,VARTA battery chargers and certain portable lighting, are subject to regulation in European Union ("EU") markets under two key EU Directives. The ï¬rst... -
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... or competitive brands; • the effects of general economic conditions, including inï¬,ation, labor costs and stock market volatility or changes in trade, monetary or ï¬scal policies in the countries where we do business; • changes in consumer preferences and demand for our products; • our... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. on Form 10-K is accurate only as of September 30, 2006 or as otherwise speciï¬ed, as our business, ï¬nancial condition, results of operations and prospects may have changed since that date. Except as required by applicable law, ... -
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... for consumer acceptance and limited shelf space based upon brand name recognition, perceived quality, price, performance, product packaging and design innovation, as well as creative marketing, promotion and distribution strategies. Our ability to compete in these consumer product markets may... -
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... limited group of retailer customers, including Wal-Mart, The Home Depot, Carrefour, Target, Lowe's, PetSmart, Canadian Tire, PetCo and Gigante. Wal-Mart Stores, Inc., our largest retailer customer, accounted for approximately 19% of our net consolidated sales in ï¬scal 2006. Our sales generally... -
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... business in foreign countries. Our international operations and exports and imports to and from foreign markets are subject to a number of special risks. These risks include, but are not limited to: • changes in the economic conditions or consumer preferences or demand for our products in these... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Sales of certain of our products are seasonal and may cause our quarterly operating results and working capital requirements to ï¬,uctuate; adverse business or economic conditions could adversely affect our business. Sales of our battery... -
Page 26
... retain qualiï¬ed replacements. Class action and derivative action lawsuits and other investigations, regardless of their merits, could have an adverse effect on our business, ï¬nancial condition and results of operations. Spectrum and certain of its ofï¬cers and directors have been named in the... -
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... us. We manufacture and market a number of complex chemical products bearing our brands relating to our lawn and garden and household insecticide and repellent products, such as fertilizers, growing media, herbicides and pesticides. On occasion, customers and some current or former employees have... -
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...- K An n u al R ep ort Spectrum Brands, Inc. ITEM 2. PROPERTIES The following table lists our principal owned or leased manufacturing, packaging, and distribution facilities at September 30, 2006: Facility North America Fennimore, Wisconsin (1) Portage, Wisconsin (1) Dixon, Illinois (2) Vinita Park... -
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... to operate distribution centers, sales ofï¬ces and administrative ofï¬ces throughout the world in support of our business. We lease our administrative headquarters, located in Atlanta, Georgia, and our primary research and development facility and North America headquarters, located in Madison... -
Page 30
... 6, 2006, a purported shareholder derivative action, captioned Errichetti v. Jones, et al., was ï¬led in the Superior Court of Fulton County for the State of Georgia, on our behalf, against us as nominal defendant, our Board of Directors, Chairman and Chief Executive Ofï¬cer David A. Jones and... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERS' PURCHASES OF EQUITY SECURITIES Our common stock, $0.01 par value per share (the "Common Stock"), is traded on the New York Stock Exchange... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Issuer Purchases of Equity Securities Total Number of Shares Purchased(1) Average Price Paid Per Share(2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased... -
Page 33
... charges-operating expenses of $33.6 million. See Note 16, Restructuring and Related Charges, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion. (2) Fiscal 2005 selected ï¬nancial data was impacted by two signiï¬cant acquisitions... -
Page 34
...CT manufacturing facility, acquired as part of the Remington acquisition and subsequently closed in ï¬scal 2004, and our Madison, WI packaging facility, which was closed in ï¬scal 2003. SFAS No. 145, "Recission of FASB Statement Nos. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical... -
Page 35
... lighting. We are a manufacturer and marketer of alkaline, zinc carbon and hearing aid batteries, as well as aquariums and aquatic health supplies and a designer and marketer of rechargeable batteries, battery-powered lighting products, electric shavers and accessories, grooming products and hair... -
Page 36
... services, customer service and other administrative functions were combined with existing counterpart organizations in Madison. Legal and certain corporate ï¬nance functions were combined directly into Spectrum's global headquarters in Atlanta. Canadian Consumer Product sales and marketing... -
Page 37
... or zinc carbon batteries in cell sizes of AA, AAA, C, D and 9-volt. Specialty batteries include rechargeable batteries, hearing aid batteries, photo batteries and watch/calculator batteries. Most consumer batteries are marketed under one of the following brands: Rayovac/VARTA, Duracell, Energizer... -
Page 38
.... We operate in the U.S. market under the brand names Spectracide, Garden Safe and Schultz. We also have exclusive brand arrangements for our Vigoro brand at The Home Depot, Sta-Green brand at Lowe's and Expert Gardener brand at Wal-Mart. In Canada, we compete using the Wilson, So-Green, Greenleaf... -
Page 39
... impact of United acquisition 26 Increase in pet products sales, excluding impact of Tetra, United and Jungle Labs acquisitions 14 Increase in Latin America Remington branded product sales 14 Impact of Jungle Labs acquisition from October 2005 - August 2006 12 Decline in Europe/ROW battery sales (89... -
Page 40
... 2006 as we experienced a product mix shift from branded batteries to lower-priced private label batteries and exited some low margin private label alkaline business. In addition, European consumers continue to shift their purchasing habits from high end electronic specialty stores and photo stores... -
Page 41
...al R ep ort Spectrum Brands, Inc. and related charges primarily related to a series of initiatives in Europe to reduce operating costs and rationalize our manufacturing structure as well as the costs associated with our integration of United and Tetra. Included in operating expenses in ï¬scal 2005... -
Page 42
... specialty stores and photo stores where we enjoy strong market shares, to deep discount and food retail channels where we have not established as strong a presence; and (iii) a shift in product mix due to consumer preferences for lowerpriced private label batteries. Sales of our Remington branded... -
Page 43
..., 2005. The purchase price allocations for the United Pet Group and Tetra acquisitions were ï¬nalized in 2006. See Note 17, Acquisitions, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information on these acquisitions. Segment net sales to... -
Page 44
...- K An n u al R ep ort Spectrum Brands, Inc. The following table summarizes restructuring and related charges we incurred in 2006 and 2005 (in millions): 2006 2005 Costs included in cost of goods sold: Breitenbach, France facility closure: Termination benefits Other associated costs United & Tetra... -
Page 45
...currency benefit, net Decline in North America alkaline battery sales Other, net Fiscal 2005 Net Sales $1,417 735 96 39 11 46 (35) (2) $2,307 the "Same Performance, Better Price" strategy as customers and consumers adjusted to the new message and the related changes in our pricing and package sizes... -
Page 46
... exchange rates of approximately $30 million. During ï¬scal 2004, the battery business in continental Europe, and in our largest European market, Germany, was negatively affected by a stagnant economy and a continuing shift from branded product sales to private label sales. From 2004 to 2005... -
Page 47
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. eï¬t of currency, the trend towards private label battery purchases negatively impacted our higher margin VARTA branded battery sales, which were down slightly. Segment proï¬tability in ï¬scal 2005 decreased to $95 million from $96 ... -
Page 48
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. As previously discussed, during 2005 we completed the ï¬rst phase of our integration initiatives related to the United and Tetra acquisitions. We have reorganized the pet businesses acquired as part of the United and Tetra acquisitions.... -
Page 49
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Interest Expense Interest expense in ï¬scal 2005 increased to $134 million from $66 million in ï¬scal 2004. This increase was primarily due to increased debt levels associated with the Tetra and United acquisitions and the $12 million ... -
Page 50
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. The Senior Credit Facilities contain ï¬nancial covenants with respect to borrowings, which include maintaining minimum interest coverage and maximum leverage ratios. In accordance with the Senior Credit Facilities, the limits imposed by... -
Page 51
... al R ep ort Spectrum Brands, Inc. Equity Financing Activities During 2006, we granted approximately 1.0 million shares of restricted stock. Of these grants, approximately 0.4 million shares are time-based and vest on a pro rata basis over either a three- or four-year period, and 0.4 million shares... -
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... An n u al R ep ort Spectrum Brands, Inc. Other Commercial Commitments The following table summarizes our other commercial commitments as of September 30, 2006, consisting entirely of standby letters of credit which back the performance of certain of our entities under various credit facilities and... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. See Note 2(h), Signiï¬cant Accounting Policies-Property, Plant and Equipment, Note 2(i), Signiï¬cant Accounting Policies- Intangible Assets, Note 4, Property, Plant and Equipment, Note 6, Intangible Assets and Note 10, Income Taxes, of... -
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...impairments relating to manufacturing initiatives and other costs directly related to the restructuring initiatives implemented. We report restructuring and related charges associated with administrative functions in operating expenses, such as initiatives impacting sales, marketing, distribution or... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. determine its funded status as of the end of the employer's ï¬scal year (with limited exceptions); and (iii) recognize changes in the funded status of a deï¬ned beneï¬t postretirement plan in the year in which the changes occur. Those... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. ï¬nancial position) for that ï¬scal year. We are currently evaluating the impact that FIN 48 will have on our ï¬nancial condition, results of operations or cash ï¬,ows. In November 2005, the FASB issued FASB Staff Position ("FSP") FAS... -
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...al R ep ort Spectrum Brands, Inc. As of September 30, 2006, the potential change in fair value of outstanding interest rate derivative instruments, assuming a 1 percentage point unfavorable shift in the underlying interest rates, would be a loss of $13.6 million. The net impact on reported earnings... -
Page 58
... and Capital Resources" in MD&A), among Spectrum Brands, Inc., formerly known as Rayovac Corporation, a Wisconsin corporation, Varta Consumer Batteries GmbH & Co. KGaA, a German partnership limited by shares, Rayovac Europe Limited, a limited liability company, each lender from time to time party... -
Page 59
... n u al R ep ort Spectrum Brands, Inc. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth the name, age and position with the Company of each of our executive ofï¬cers and directors as of December 4, 2006: Name David A. Jones Kent J. Hussey Randall... -
Page 60
...consumer products industry. From August 1996 to April 1998, Mr. Lupo served as Senior Vice President and Chief Operating Ofï¬cer for the international division of Wal-Mart Stores, Inc. From October 1990 to August 1996, Mr. Lupo served as Senior Vice President-General Merchandise Manager of Wal-Mart... -
Page 61
...Spectrum Brands, Inc. Code of Business Conduct and Ethics, a code of ethics that applies to all of our directors, ofï¬cers and employees. The Spectrum Brands, Inc. Code of Business Conduct and Ethics is publicly available on our website at www.spectrumbrands.com under "Investor Relations- Corporate... -
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... Long-Term Compensation Restricted Securities Stock Underlying (2) Awards($) Options(#) All Other Compensation ($) Name and Principal Position Fiscal Year Salary($) Bonus($) (1) David A. Jones, Chairman of the Board and Chief Executive Officer John A. Heil President-Global Pet Group 2006 2005... -
Page 63
...$9,100 in Company matching contributions to Mr. Heil's account under the United Pet Group Proï¬t Sharing Plan, in Fiscal 2006 and 2005, respectively; (c) for Mr. Hussey, $17,200 and $6,600 for payments of annual term life insurance premiums in Fiscal 2006 and 2005, respectively and $13,200, $12,600... -
Page 64
... $ David A. Jones John A. Heil Kent J. Hussey Kenneth V. Biller Rèmy E. Burel 0 0 0 0 0 $0 $0 $0 $0 $0 519,445/29,750 0/0 220,006/12,750 88,213/8,500 8,500/8,500 $604,240/$0 $0/$0 $0/$0 $0/$0 $0/$0 (1) These values are calculated using the $8.44 per share closing price of the Common Stock as... -
Page 65
... an annual retainer of $50,000 (four equal installments of $12,500) for his service as a director and as Employment Agreements We entered into amended and restated employment agreements with each of Kent J. Hussey and Kenneth V. Biller effective as of April 1, 2005 and with David A. Jones effective... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. The agreements with Messrs. Heil, Hussey and Biller expire on September 30, 2008, and the agreement with Mr. Jones expires on September 30, 2009. Mr. Burel's agreement has no speciï¬ed term, but either party may terminate the agreement ... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Pursuant to their agreements, Messrs. Jones, Heil, Hussey, Biller and Burel are entitled to participate in the Company's equity-based compensation plans. Messrs. Heil, Hussey, Biller and Burel received restricted stock grants under our ... -
Page 68
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Name and Address of Beneficial Owner Number of Shares Number of Shares Subject to Options(1) Percent THL Parties c/o Thomas H. Lee Partners, LP 100 Federal Street, 35th Floor Boston, MA 02110 Ameriprise Financial Inc. General Counsel... -
Page 69
...ï¬cially owned by it, which power may be exercised by its general partner, ACPGP. ACA, as managing member of ACPGP, directs ACPGP's operations. Neither ACPGP nor ACA own directly any shares of Common Stock. By reason of the provisions of Rule 13d-3 of the Securities Exchange Act of 1934 (the "Act... -
Page 70
...al R ep ort Spectrum Brands, Inc. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On February 7, 2005, the Company acquired all of the equity interests of United pursuant to the Agreement and Plan of Merger (as amended, the "Merger Agreement") by and among the Company, Lindbergh Corporation... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The following table summarizes the fees KPMG LLP, our independent registered public accounting ï¬rm, billed to us for each of the last two ï¬scal years (in millions): Audit Fees ... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) The following documents are ï¬led as part of or are included in this Annual Report on Form 10-K: 1. The ï¬nancial statements listed in the Index to Consolidated Financial ... -
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... u al R ep ort Spectrum Brands, Inc. Report of Independent Registered Accounting Firm The Board of Directors and Shareholders Spectrum Brands, Inc.: We have audited the accompanying consolidated balance sheets of Spectrum Brands, Inc. and subsidiaries (the Company) as of September 30, 2006 and 2005... -
Page 74
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders Spectrum Brands, Inc.: We have audited management's assessment, included in the accompanying Management's Annual Report on Internal Controls ... -
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2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Consolidated Balance Sheets September 30, 2006 and 2005 (in thousands, except per share amounts) 2006 2005 Assets Current assets: Cash and cash equivalents Receivables: Trade accounts receivable, net of allowances of $21,394 and $20,... -
Page 76
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Consolidated Statements of Operations Years ended September 30, 2006, 2005 and 2004 (in thousands, except per share amounts) 2006 $2,551,752 1,576,066 22,452 953,234 557,299 181,975 30,568 33,642 432,978 1,236,462 (283,228) 176,955 (4,... -
Page 77
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) Years ended September 30, 2006, 2005 and 2004 Common Stock (in thousands) Shares Amount Accumulated Notes (Accumulated Other Receivable Additional Deï¬cit) ... -
Page 78
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Consolidated Statements of Cash Flows Years ended September 30, 2006, 2005 and 2004 (in thousands) 2006 $(428,452) $ 2005 41,363 2004 $ 56,160 Cash ï¬,ows from operating activities: (Loss) income from continuing operations ... -
Page 79
..., zinc carbon and hearing aid batteries, as well as aquariums and aquatic health supplies, a designer and marketer of rechargeable batteries and battery-powered lighting products and a designer and marketer of electric shavers and accessories, grooming products and hair care appliances. The Company... -
Page 80
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Company is not obligated to allow for, and the Company's general policy is not to accept, product returns associated with battery sales. The Company does accept returns in speciï¬c instances related to its shaving, grooming, personal ... -
Page 81
... by comparison to the market capitalization of the Company. The Company ï¬rst compared the fair value of its reporting units with their carrying amounts, including goodwill. This ï¬rst step indicated that the fair value of the Global Pet and Latin America reporting units were less than their... -
Page 82
... - K An n u al R ep ort Spectrum Brands, Inc. In addition, in accordance with SFAS 142, the Company, with the assistance of independent third party valuation specialists, also compared the carrying amount of trade name intangible assets with fair value. Fair value was determined using a relief from... -
Page 83
...to transport products to customers and salaries and overhead costs related to activities to prepare the Company's products for shipment at the Company's distribution facilities. (o) Advertising Costs The Company incurred expenses for advertising of $53,564, $59,504 and $51,321 in 2006, 2005 and 2004... -
Page 84
... 2006 and 2005 was $0. At September 30, 2006 and 2005, $129,663 and $0, respectively, of such foreign exchange derivative contracts were outstanding. The Company is exposed to risk from ï¬,uctuating prices for raw materials, including zinc, urea and di-ammonium phosphates used in its manufacturing... -
Page 85
...all other countries in which the Company conducts Legacy Businesses ("Europe/ROW"); and (iv) Global Pet, which consists of the acquired United Pet Group, Tetra and Jungle Labs businesses (together, "Global Pet"). The presentation of all historical segment reporting herein has been changed to conform... -
Page 86
... remaining 50% are performance-based. Vesting of such performance-based restricted stock will occur only upon achievement of certain performance goals established by the Board of Directors of the Company. Generally, performance targets consist of EPS ("Earnings Per Share"), segment EBIT ("Earnings... -
Page 87
... al R ep ort Spectrum Brands, Inc. The fair value of restricted stock is determined based on the market price of the Company's shares on the grant date. A summary of the status of the Company's nonvested restricted stock as of September 30, 2006, and changes during the year ended September 30, 2006... -
Page 88
... al R ep ort Spectrum Brands, Inc. The following table summarizes the stock option transactions: 2006 WeightedAverage Exercise Price Aggregate Intrinsic Value 2005 WeightedAverage Exercise Price 2004 WeightedAverage Exercise Price Options Options Options Outstanding, beginning of period Granted... -
Page 89
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. statement of ï¬nancial position is effective for ï¬scal years ending after December 15, 2008. As of September 30, 2006, the Company's net unfunded beneï¬t obligation was approximately $55,000; accordingly, the adoption of SFAS 158 ... -
Page 90
... balance in assets held for sale as of September 30, 2005 consisted primarily of the former Madison,Wisconsin manufacturing facility, the former Remington facility in Bridgeport, Connecticut and a distribution facility in the Dominican Republic. 78 S PEC TRU M BR A N D S | 2 0 0 6 ANNUAL REPORT -
Page 91
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. (6) Intangible Assets Intangible assets consist of the following: North America Europe/ROW Latin America Global Pet Total Goodwill: Balance as of September 30, 2004 Goodwill recognized during period Purchase price allocation during ... -
Page 92
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. The Company completed the acquisitions of United, Tetra and Jungle during 2005 and the acquisitions of Ningbo and Microlite during 2004. (See also Note 17, Acquisitions, for additional information on the Ningbo, Microlite, United, Tetra ... -
Page 93
... of a change of control. In addition, the terms of the notes restrict or limit the Company's ability to, among other things: (i) pay dividends or make other restricted payments; (ii) incur additional indebtedness and issue preferred stock; (iii) create liens; (iv) enter into mergers, consolidations... -
Page 94
..., in 2005 the Company issued 13,750 shares of common stock from treasury as partial consideration for the United acquisition (see Note 17, Acquisitions, where the United acquisition is further described). The value of these shares was calculated at a share price of $31.94. The share price of $31... -
Page 95
...ï¬cant Accounting Policies-Stock Compensation and Note 8, Shareholders' Equity, for information on grants and forfeitures of restricted shares during 2006, 2005 and 2004. (9) Stock Option Plans In 1996, the Company's Board of Directors ("Board") approved the Rayovac Corporation 1996 Stock Option... -
Page 96
..., 2006 2005 Current deferred tax assets: Employee benefits Restructuring Inventories and receivables Marketing and promotional accruals Net operating loss and capital loss carryforwards Other Valuation allowance Total current deferred tax assets Current deferred tax liabilities: Property, plant and... -
Page 97
...January 2006. The Company has reï¬,ected Remington's United States and United Kingdom Service Centers as discontinued operations. The Company discontinued operations at these Service Centers during 2004 as part of the Remington integration initiatives. See Note 16, Restructuring and Related Charges... -
Page 98
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. The following tables provide additional information on the Company's pension and other postretirement beneï¬t plans: Pension and Deferred Compensation Benefits 2006 2005 2006 Other Benefits 2005 Change in benefit obligation Benefit ... -
Page 99
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Pension Benefits 2006 2005 2004 2006 Other Benefits 2005 2004 Components of net periodic benefit cost Service cost Interest cost Expected return on assets Amortization of prior service cost Amortization of transition obligation (Gain) ... -
Page 100
... the acquired United Pet Group, Tetra and Jungle Labs businesses (together, "Global Pet"). The presentation of all historical segment reporting herein has been changed to conform to this segment reporting. Net Sales to External Customers 2006 2005 2004 North America Europe/ROW Latin America Global... -
Page 101
... 23,200 8,503 8,245 $62,750 $14,607 9,142 3,143 - $26,892 Geographic Disclosures-Net Sales to External Customers 2006 2005 2004 $(456,086) $62,876 $90,532 (A) Fiscal 2005 includes a non-cash charge to cost of goods sold of $23,135 related to the fair value adjustment, required under generally... -
Page 102
.... The purchase price was determined through negotiations between representatives of the Company, who were operating under supervision and direction of an acquisition committee of the Board of Directors of the Company, and representatives of United. 90 S PEC TRU M BR A N D S | 2 0 0 6 ANNUAL REPORT -
Page 103
... capital stock. The Company is the lessee of several operating facilities from Rex Realty, Inc., a company owned by certain of the Company's stockholders and operated by a former United executive and past member of United's Board of Directors. These afï¬liate leases expire at various dates through... -
Page 104
... packaging center and relocating such operations to the Dischingen, Germany battery plant, transferring private label battery production at the Company's Dischingen, Germany battery plant to the Company's manufacturing facility in China and restructuring the sales, marketing and support functions... -
Page 105
... 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 distribution centers; and moving the Company's corporate headquarters... -
Page 106
... price also included acquisition related expenditures of approximately $16,100. Tetra manufactures, distributes and markets a comprehensive line of foods, equipment and care products for ï¬sh and reptiles, along with accessories for home aquariums and ponds. Tetra operates in over 90 countries... -
Page 107
...Ltda. of 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 globally. The... -
Page 108
... the number of shares used to calculate earnings per share have also been made to present shares as if the 13,750 treasury shares issued in connection with the United acquisition were outstanding on October 1, 2003. 2006 2005 2004 Net sales Reported net sales United pro forma adjustments Tetra pro... -
Page 109
... the effect of the Nu-Gro Pro and Tech discontinued operations. See Note 11, Discontinued Operations, for additional information. (C) Due to rounding and the method required by SFAS 128, "Earnings Per Share," to calculate per share data, the quarterly per share data does not total the full year... -
Page 110
... a guarantor subsidiary) merged with Spectrum Brands, Inc. (the parent company). As a result of the merger, the results of operations and cash ï¬,ows of Remington Products Company, L.L.C. are included with Spectrum Brands, Inc. for ï¬scal 2004. 98 S PEC TRU M BR A N D S | 2 0 0 6 ANNUAL REPORT -
Page 111
... taxes payable Restructuring and related charges Accrued interest Liabilities held for sale Other Total current liabilities Long-term debt, net of current maturities Employee benefit obligations, net of current portion Deferred income taxes Other Total liabilities Shareholders' equity: Common stock... -
Page 112
...R ep ort Spectrum Brands, Inc. Consolidating Statement of Operations Year Ended September 30, 2006 Parent Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminations Consolidated Total Net sales Cost of goods sold Restructuring and related charges Gross profit Operating expenses: Selling General... -
Page 113
... taxes payable Restructuring and related charges Accrued interest Liabilities held for sale Other Total current liabilities Long-term debt, net of current maturities Employee benefit obligations, net of current portion Deferred income taxes Other Total liabilities Shareholders' equity: Common stock... -
Page 114
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Consolidating Statement of Operations Year Ended September 30, 2005 Parent Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminations Consolidated Total Net sales Cost of goods sold Restructuring and related charges Gross profit ... -
Page 115
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Consolidating Statement of Operations Year Ended September 30, 2004 Parent Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminations Consolidated Total Net sales Cost of goods sold Restructuring and related charges Gross profit ... -
Page 116
...u al R ep ort Spectrum Brands, Inc. SPECTRUM BRANDS, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS For the years ended September 30, 2006, 2005 and 2004 (in thousands) Column A Column B Balance at Beginning of Period Column C Additions Charged to Costs and Expenses Related to... -
Page 117
... by the undersigned thereunto duly authorized. SPECTRUM BRANDS, INC. /s/ David A. Jones David A. Jones Chairman of the Board and Chief Executive Ofï¬cer DATE: December 14, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following... -
Page 118
..., dated November 22, 2005, by and among Agrium Inc., United Industries Corporation, and Nu-Gro Holding Company L.P. (ï¬led by incorporation by reference to the Current Report on Form 8-K ï¬led with the SEC on January 30, 2006). Exhibit 3.1 Amended and Restated Articles of Incorporation of Spectrum... -
Page 119
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Exhibit 4.4 Supplemental Indenture, dated October 24, 2003, by and among Rayovac Corporation, ROV Holding, Inc., Rovcal, Inc., Remington Products Company, L.L.C. and U.S. Bank National Association (ï¬led by incorporation by reference to... -
Page 120
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Exhibit 10.9 Amendment No. 1, dated April 29, 2005, to the Fourth Amended and Restated Credit Agreement dated as of February 7, 2005, among Rayovac Corporation, Varta Consumer Batteries GmbH & Co. KGaA, Rayovac Europe Limited, each ... -
Page 121
....7 to the Current Report on Form 8-K ï¬led with the SEC on February 11, 2005). Exhibit 10.19 Technical Collaboration, Sale and Supply Agreement, dated as of March 5, 1998, by and among Rayovac Corporation, Matsushita Battery Industrial Co., Ltd. and Matsushita Electric Industrial Co., Ltd. (ï¬led... -
Page 122
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Exhibit 23.1 Consent of Independent Registered Public Accounting Firm* Exhibit 31.1 Certiï¬cation of Chief Executive Ofï¬cer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange... BR A N D S | 2 0 0 6 ANNUAL REPORT -
Page 123
... Company Rayovac (UK) Limited Rayovac Guatemala, S.A. Tetra Holding (US) Spectrum Brands Lux S.A.R.L Tetra Holding GmbH Rayovac Europe GmbH VARTA Consumer Batteries GmbH & Co. KGaA United Industries Corporation United Pet Group, Inc. Jurisdiction USA (California) USA (Delaware) Cayman Islands United... -
Page 124
... in the annual report on Form 10-K of Spectrum Brands, Inc. Our report refers to the Company's adoption of Statement of Financial Accounting Standards No. 123(R), "Share-Based Payment" effective October 1, 2005, the beginning of the Company's ï¬scal year ended September 30, 2006. Atlanta, Georgia... -
Page 125
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Exhibit 31.1 CERTIFICATIONS I, David A. Jones, Chief Executive Ofï¬cer, certify that: 1. I have reviewed this annual report on Form 10-K of Spectrum Brands, Inc. (the "registrant"); 2. Based on my knowledge, this report does not contain... -
Page 126
2006 F o r m 1 0 - K An n u al R ep ort Spectrum Brands, Inc. Exhibit 31.2 CERTIFICATIONS I, Randall J. Steward, Chief Financial Ofï¬cer, certify that: 1. I have reviewed this annual report on Form 10-K of Spectrum Brands, Inc. (the "registrant"); 2. Based on my knowledge, this report does not ... -
Page 127
...-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of Spectrum Brands, Inc. (the "Company") for the ï¬scal year ended September 30, 2006 as ï¬led with the Securities and Exchange Commission on the date hereof (the "Report"), I, David A. Jones, as Chief Executive Ofï¬cer of the... -
Page 128
...-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of Spectrum Brands, Inc. (the "Company") for the ï¬scal year ended September 30, 2006 as ï¬led with the Securities and Exchange Commission on the date hereof (the "Report"), I, Randall J. Steward, as Chief Financial Ofï¬cer of... -
Page 129
...Sarbanes-Oxley Act relating to the quality of the Company's public disclosure as exhibits to the Company's Annual Report on Form 10-K for ï¬scal year 2006. INVESTOR RELATIONS Shareholders and others seeking ï¬ nancial information about Spectrum Brands should contact Investor Relations at (770) 829... -
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