Rayovac 2009 Annual Report Download - page 66

Table of Contents
Index to Financial Statements
increase was driven by a $5 million increase in North America associated with sales gains from new product launches coupled with favorable foreign
exchange translation of $4 million that was tempered by decreases in Latin America and Europe due to declining market demand.
Segment profitability in Fiscal 2008 increased to $163 million from $144 million in Fiscal 2007. Segment profitability as a percentage of net sales
increased to 10.9% in Fiscal 2008 as compared with 10.0% in Fiscal 2007. The increase in segment profitability during Fiscal 2008 was primarily the result
of cost savings from our global realignment announced in January 2007. See “Restructuring and Related Charges” below, as well as Note 15, Restructuring
and Related Charges, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10−K for additional information regarding our
restructuring and related charges.
Segment assets at September 30, 2008 decreased to $1,183 million from $1,377 million at September 30, 2007. The decrease is primarily attributable
to the impact of foreign currency translation coupled with the impairment of goodwill and certain trade name intangible assets, a non−cash charge, in Fiscal
2008. See “Goodwill and Intangibles Impairment” below as well Note 3(i), Significant Accounting Policies and Practices—Intangible Assets, of Notes to
Consolidated Financial Statements included in this Annual Report on Form 10−K for additional information regarding this impairment charge and the
amount attributable to Global Batteries & Personal Care. Goodwill and intangible assets at September 30, 2008 total approximately $416 million and
primarily relate to the ROV Ltd., VARTA AG, Remington Products and Microlite acquisitions. Included in long−term liabilities assumed in connection
with the acquisition of Microlite is a provision for “presumed” credits applied to the Brazilian excise tax on manufactured products, or “IPI taxes.” Although
a previous ruling by the Brazilian Federal Supreme Court had been issued in favor of a specific Brazilian taxpayer with similar tax credits, on February 15,
2007 the Brazilian Federal Supreme Court 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, 2008, these amounts totaled approximately $14 million and are
included in Other long−term liabilities in the Consolidated Statements of Financial Position included in this Annual Report on Form 10−K.
Global Pet Supplies
2008 2007
(in millions)
Net sales to external customers $ 599 $ 563
Segment profit $ 69 $ 71
Segment profit as a % of net sales 11.5% 12.6%
Assets as of September 30, $ 700 $1,202
Segment net sales to external customers in Fiscal 2008 increased to $599 million from $563 million in Fiscal 2007, representing an increase of $36
million or 6%. Favorable foreign currency exchange translation impacted net sales in Fiscal 2008 compared to Fiscal 2007 by approximately $18 million.
Worldwide aquatic sales for Fiscal 2008 increased slightly to $398 million when compared to sales of $383 million in Fiscal 2007. The increase in
worldwide aquatic sales was due to an increase in Europe of $7 million coupled with favorable foreign exchange of $17 million, offset by sales decreases in
North America of $9 million. Companion animal net sales increased to $201 million in Fiscal 2008 compared to $180 million in Fiscal 2007, an increase of
$21 million, or 11%. We continued to see strong growth in companion animal sales in the U.S. driven by our Dingo brand, coupled with increased volume
in Europe and Pacific Rim associated with the continued introduction of companion animal products.
Segment profitability in Fiscal 2008 decreased to $69 million from $71 million in Fiscal 2007. Segment profitability as a percentage of sales in Fiscal
2008 decreased to 11.5% from 12.6% in the same period last year. This decrease in segment profitability margin was primarily due to the non−recurrence of
a curtailment gain of approximately $3 million, related to the termination of a postretirement plan recorded in Fiscal 2007, coupled with an increase in input
costs.
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