Rayovac 2008 Annual Report Download - page 55

Table of Contents
Index to Financial Statements
ruled against certain Brazilian taxpayers with respect to the legality and constitutionality of the IPI “presumed” tax credits. This decision is applicable to all
similarly-situated taxpayers. At September 30, 2007, these amounts totaled approximately $33 million and are included in Other long-term liabilities in the
Consolidated Balance Sheets included in this Annual Report on Form 10-K.
Global Pet Supplies
2007 2006
(in millions)
Net sales to external customers $ 563 $ 543
Segment profit $ 71 $ 72
Segment profit as a % of net sales 12.6% 13.3%
Assets as of September 30, $ 1,202 $ 1,171
Segment net sales to external customers in Fiscal 2007 increased to $563 million from $543 million in Fiscal 2006, representing an increase of $20 million
or 4%. Favorable foreign currency exchange translation impacted net sales in Fiscal 2007 by approximately $8 million. The increase in net sales in Fiscal 2007
was primarily driven by growth of 10% in our companion animal products, principally due to sales increases of our Dingo brand, coupled with the introduction of
companion animal products in Europe. Worldwide aquatic sales increased approximately $3 million, or 1%, as 17% growth in European aquatic sales was
tempered by sales declines in the North American aquatic market.
Segment profitability in Fiscal 2007 decreased to $71 million from $72 million in Fiscal 2006. Segment profitability as a percentage of sales in Fiscal 2007
decreased to 12.6% from 13.3% in the same period last year. This decrease in segment profitability was due to increased spending on marketing and advertising
coupled with increases in manufacturing and distribution costs, primarily resulting from challenges encountered in our initiative to consolidate distribution and
manufacturing facilities. These costs were somewhat tempered by a curtailment gain of approximately $3 million related to the termination of a post-retirement
benefit plan.
Segment assets as of September 30, 2007 increased to $1,202 million from $1,171 million at September 30, 2006. The increase is primarily due to the
impact of foreign currency translation. Goodwill and intangible assets as of September 30, 2007 total approximately $964 million and primarily relate to the
acquisitions of Tetra and the United Pet Group division of United.
Home and Garden
2007 2006
(in millions)
Net sales to external customers $ 570 $ 568
Segment profit $ 47 $ 55
Segment profit as a % of net sales 8.2% 9.7%
Assets as of September 30, $ 548 $ 692
Segment net sales to external customers in Fiscal 2007 increased to $570 million from $568 million in Fiscal 2006, representing an increase of $2 million.
Lawn and garden product net sales decreased $8 million, or 2%, when compared to Fiscal 2006. The decrease in net sales is primarily due to volume shortfalls in
growing media. Net sales for Household insect controls increased $11 million, or 7%, when compared to Fiscal 2006. The increase in net sales was driven by
expanded distribution in insect repellants.
Segment profitability in Fiscal 2007 decreased to $47 million from $55 million in Fiscal 2006. Segment profitability as a percentage of sales in Fiscal 2007
decreased to 8.2% from 9.7% in the same period last year. The decrease in segment profit for Fiscal 2007 was primarily due to unfavorable manufacturing
variances associated with the lawn and garden business, offset by no depreciation and amortization expense being recorded
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008