Rayovac 2006 Annual Report Download - page 90

78 SPECTRUM BRANDS | 2006 ANNUAL REPORT
In November 2005, the FASB issued FASB Staff Position
(“FSP”) FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-
Temporary Impairment and Its Application to Certain Investments” (“FSP
FAS 115-1 and FAS 124-1”). FSP FAS 115-1 and FAS 124-1
address the determination as to when an impairment in equity
securities (including cost method investments) and debt securi-
ties that can contractually be prepaid or otherwise settled in such
a way that the investor would not recover substantially all of its
cost should be deemed other-than-temporary. FSP FAS 115-1
and FAS 124-1 nullify certain requirements under EITF Issue No.
03-01, “The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments,” that required the investor to
make an evidence-based judgment as to whether it has the ability
and intent to hold an investment for a reasonable period of time
suffi cient for a forecasted recovery of fair value up to (or beyond)
the cost of the investment in determining whether the impair-
ment was other-than-temporary, and the measurement of the
impairment loss. The guidance in FSP FAS 115-1 and FAS 124-1
is effective for reporting periods beginning after December 15,
2005. The Company does not believe the adoption of FSP FAS
115-1 and FAS 124-1 will have a material impact on its fi nancial
position, results of operations or cash fl ows.
(3) Inventories
Inventories consist of the following:
September 30,
2006 2005
Raw materials $121,793 $117,175
Work-in-process 36,205 37,931
Finished goods 302,674 296,447
$460,672 $451,553
(4) Property, Plant and Equipment
Property, plant and equipment consist of the following:
September 30,
2006 2005
Land, buildings and improvements $102,147 $ 73,649
Machinery, equipment and other 423,862 394,148
Construction in progress 24,046 37,948
550,055 505,745
Less accumulated depreciation 238,216 201,422
$311,839 $304,323
(5) Assets Held for Sale
At September 30, 2006, assets held for sale totaling $3,499
were included in assets held for sale in the Consolidated Balance
Sheets consisting primarily of a distribution facility in the
Dominican Republic and a manufacturing facility in France.
During 2006, an $8,876 gain on sale of assets is included in the
Consolidated Statements of Cash Flows. This gain includes an
$8,260 gain on the sale of a Bridgeport, Connecticut facility,
previously included in assets held for sale.
At September 30, 2005, assets held for sale totaling $108,174
were included in assets held for sale in the Consolidated Balance
Sheets. As of September 30, 2005, the Company had $101,485
included in assets held for sale and $22,294 included in liabilities
held for sale in its Consolidated Balance Sheets related to the cer-
tain assets of the Nu-Gro Corporation being solicited for sale. (See
Note 11, Discontinued Operations, where the subsequent sale of
the assets is further discussed.) All relevant criteria of SFAS 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, allowing
for assets held for sale classifi cation have been met. The following
table details the components of the Nu-Gro assets held for sale at
September 30, 2005:
Amount
Trade receivables, net of allowance
for doubtful accounts $ 13,555
Inventories 17,810
Property, plant and equipment, net 18,862
Goodwill 29,228
Intangible assets, net 21,499
Other current assets 531
Total assets held for sale 101,485
Accounts payable 8,678
Accrued liabilities and other 6,130
Deferred income taxes 7,486
Total liabilities held for sale 22,294
Total Nu-Gro net assets held for sale $ 79,191
The remaining balance in assets held for sale as of September 30,
2005 consisted primarily of the former Madison, Wisconsin manu-
facturing facility, the former Remington facility in Bridgeport,
Connecticut and a distribution facility in the Dominican Republic.
2006 Form 10-K Annual Report
Spectrum Brands, Inc.