Rayovac 2011 Annual Report Download - page 153

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SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(In thousands, except per share amounts)
licensing agreements and the importance of the technology and profit levels, among other
considerations. Royalty rates used in the determination of the fair values of technologies were 2%
of expected net sales related to the respective technology. The Company anticipates using these
technologies through the legal life of the underlying patent and therefore the expected life of these
technologies was equal to the remaining legal life of the underlying patents ranging from 9 to 11
years. In estimating the fair value of the technologies, net sales were estimated to grow at a rate of
3%-12% annually. Income taxes were estimated at 37% and amounts were discounted using the
rate of 15.5%. The technology assets were valued at $4,100 under this approach.
Supplemental Pro Forma Information (Unaudited)
The following reflects the Company’s pro forma results had the results of Russell Hobbs been included for
all periods beginning after September 30, 2008 through Fiscal 2010.
Successor Company
Predecessor
Company
2010
Period from
August 31, 2009
through
September 30,
2009
Period from
October 1, 2008
through
August 30,
2009
Net sales:
Reported Net sales ...................................... $2,567,011 $219,888 $2,010,648
Russell Hobbs adjustment ................................ 543,952 64,641 711,046
Pro forma Net sales ..................................... $3,110,963 $284,529 $2,721,694
(Loss) income from continuing operations:
Reported (loss) income from continuing operations ............ $ (187,372) $ (71,193) $1,100,743
Russell Hobbs adjustment ................................ (5,504) (2,284) (25,121)
Pro forma (loss) income from continuing operations ........... $ (192,876) $ (73,477) $1,075,622
Basic and Diluted earnings per share from continuing
operations(A) :
Reported Basic and Diluted earnings per share from continuing
operations ........................................... $ (5.20) $ (2.37) $ 21.45
Russell Hobbs adjustment ................................ (0.16) (0.08) (0.49)
Pro forma basic and diluted earnings per share from continuing
operations ........................................... $ (5.36) $ (2.45) $ 20.96
(A) The Company has not assumed the exercise of common stock equivalents as the impact would be antidilutive.
Seed Resources
On December 3, 2010, the Company completed the $10,524 cash acquisition of Seed Resources. Seed
Resources is a wild bird seed cake producer through its Birdola premium brand seed cakes. This acquisition was
not significant individually. In accordance with ASC 805, the Company accounted for the acquisition by
applying the acquisition method of accounting.
The results of Seed Resources operations since December 3, 2010 are included in the Company’s
Consolidated Statements of Operations and are reported as part of the Global Pet Supplies business segment. The
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