Rayovac 2011 Annual Report Download - page 50

Business Overview
We manufacture and market alkaline, zinc carbon and hearing aid batteries, herbicides, insecticides and
repellants and specialty pet supplies. We design and market rechargeable batteries, battery-powered lighting
products, electric shavers and accessories, grooming products and hair care appliances. With the addition of
Russell Hobbs we design, market and distribute a broad range of branded small household appliances and
personal care products. Our manufacturing and product development facilities are located in the United States,
Europe, Latin America and Asia. Substantially all of our rechargeable batteries and chargers, shaving and
grooming products, small household appliances, personal care products and portable lighting products are
manufactured by third-party suppliers, primarily located in Asia.
We sell our products in approximately 130 countries through a variety of trade channels, including retailers,
wholesalers and distributors, hearing aid professionals, industrial distributors and original equipment
manufacturers (“OEMs”) and enjoy strong name recognition in our markets under the Rayovac, VARTA and
Remington brands, each of which has been in existence for more than 80 years, and under the Tetra, 8-in-1,
Spectracide, Cutter, Black & Decker, George Foreman, Russell Hobbs, Farberware and various other brands.
Our diversified global branded consumer products have positions in seven major product categories:
consumer batteries; pet supplies; home and garden control products; electric shaving and grooming products;
small appliances; electric personal care products; and portable lighting. Our chief operating decision-maker
manages the businesses in three vertically integrated, product-focused reporting segments: (i) Global Batteries &
Appliances, which consists of our worldwide battery, electric shaving and grooming, electric personal care,
portable lighting business and small appliances primarily in the kitchen and home product categories (“Global
Batteries & Appliances”); (ii) Global Pet Supplies, which consists of our worldwide pet supplies business
(“Global Pet Supplies”); and (iii) Home and Garden Business, which consists of our home and garden and insect
control business (the “Home and Garden Business”). Management reviews our performance based on these
segments. For information pertaining to our business segments, see Note 11, “Segment Information” of Notes to
Consolidated Financial Statements, included in this Annual Report on Form 10-K for further information on our
operating segments.
Global and geographic strategic initiatives and financial objectives are determined at the corporate level.
Each business segment is responsible for implementing defined strategic initiatives and achieving certain
financial objectives and has a general manager responsible for sales and marketing initiatives and the financial
results for all product lines within that business segment.
Our operating performance is influenced by a number of factors including: general economic conditions;
foreign exchange fluctuations; trends in consumer markets; consumer confidence and preferences; our overall
product line mix, including pricing and gross margin, which vary by product line and geographic market; pricing
of certain raw materials and commodities; energy and fuel prices; and our general competitive position,
especially as impacted by our competitors’ advertising and promotional activities and pricing strategies.
In November 2008, our board of directors committed to the shutdown of the growing products portion of the
Home and Garden Business, which includes the manufacturing and marketing of 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 for the growing products portion of the Home and Garden Business for
Fiscal 2009. We believe the shutdown was consistent with what we have done in other areas of our business to
eliminate unprofitable products from our portfolio. As of March 29, 2009, we completed the shutdown of the
growing products portion of the Home and Garden Business. Accordingly, the presentation herein of the results
of continuing operations excludes the growing products portion of the Home and Garden Business for all periods
presented. See Note 16, Discontinued Operations, to our Consolidated Financial Statements included in this
Annual Report on Form 10-K for further details on the disposal of the growing products portion of the Home and
Garden Business.
40