Rayovac 2009 Annual Report Download - page 141

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
Remington brands, each of which has been in existence for more than 80 years, and under the Tetra, 8in1, Spectracide, Cutter and various other brands.
In the third quarter of the Predecessor Company’s fiscal year ended September 30, 2006, the Predecessor Company engaged advisors to assist it in
exploring possible strategic options, including divesting certain assets, in order to reduce its outstanding indebtedness. In connection with this undertaking,
during the first quarter of the Predecessor Company’s fiscal year ended September 30, 2007 the Predecessor Company approved and initiated a plan to sell
the Home and Garden Business, which at the time was comprised of U.S. and Canadian divisions and was engaged in the manufacturing and marketing of
lawn and garden and insect control products as well as growing media products. As a result, the Predecessor Company designated certain assets and
liabilities related to the Home and Garden Business as held for sale and designated the Home and Garden Business as discontinued operations. On
November 1, 2007, the Predecessor Company sold the Canadian division of the Home and Garden Business. See Note 10, Discontinued Operations, for
further details on the sale of the Canadian division of the Home and Garden Business.
During the second quarter of the Predecessor Company’s fiscal year ended September 30, 2008 the Predecessor Company determined that in view of
the difficulty in predicting the timing or probability of a sale of the Home and Garden Business, the requirements under U.S. generally accepted accounting
principles (“GAAP”), necessary to classify the Home and Garden Business as discontinued operations were no longer met. As a result, effective
December 31, 2007, the Predecessor Company reclassified the Home and Garden Business, which had been designated as a discontinued operation since
October 1, 2006, as a continuing operation. Accordingly, the presentation herein of the results of continuing operations includes the Home and Garden
Business, without the Canadian division which, as indicated above, was sold on November 1, 2007, for all periods presented.
On May 20, 2008, the Predecessor Company entered into a definitive agreement for the sale of Global Pet Supplies with Salton Inc. (“Salton”) and
Applica Pet Products LLC (“Applica”), each controlled affiliates of Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special
Situations Fund, L.P. The agreement was subject to a number of closing conditions, including, without limitation, consent of the Predecessor Company’s
lenders under its senior credit facilities. The Predecessor Company was unable to obtain the consent of the lenders under its senior credit facilities, and, on
July 13, 2008, the Predecessor Company entered into a termination agreement with Salton and Applica to mutually terminate the definitive agreement.
Pursuant to the termination agreement, as a condition to the termination, the Predecessor Company paid Salton and Applica $3,000 as a reimbursement of
expenses.
In November 2008, the Predecessor Company’s board of directors committed to the shutdown of the growing products portion of the Home and
Garden Business, which includes fertilizers, enriched soils, mulch and grass seed, following an evaluation of the historical lack of profitability and the
projected input costs and significant working capital demands of the growing product portion of the Home and Garden Business for the Predecessor
Company’s fiscal year ended September 30, 2009 (“Fiscal 2009”). The Company believes the shutdown is consistent with what the Company has done in
other areas of its business to eliminate unprofitable products from its portfolio. During the second quarter of Fiscal 2009, the Predecessor Company
completed the shutdown of the growing products portion of the Home and Garden Business. See Note 10, Discontinued Operations, for further details on
the shutdown of the growing products portion of the Home and Garden Business.
On December 15, 2008, the Predecessor Company was notified that the Predecessor Company’s common stock would be suspended from trading on
the New York Stock Exchange (the “NYSE”) prior to the opening of
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