Rayovac 2011 Annual Report Download - page 60

due to a full year of small appliances sales of $778 million in Fiscal 2011 compared to $231 million during Fiscal
2010, which only includes sales after the Merger. Favorable foreign currency exchange translation impacted sales
in Fiscal 2011 by approximately $37 million when compared to Fiscal 2010.
Consumer battery sales for Fiscal 2011 decreased slightly to $862 million when compared to Fiscal 2010
sales of $866 million. The decrease is attributable to a decline in specialty battery sales of $24 million, which
was tempered by increased alkaline battery sales of $9 million and favorable foreign exchange translation of $11
million. The $24 million decrease in specialty battery sales was driven by a decrease in Latin American sales of
$26 million, primarily due to decreased volume in Brazil as a result of competitive pressures in the region
tempered by increased sales of $3 million in North America, predominantly driven by distribution gains. The $9
million increase in alkaline sales is primarily attributable to increased sales in North America of $14 million
resulting from distribution gains, strong holiday sales in the first quarter of Fiscal 2011 and incremental sales due
to severe weather during the year coupled with increased European sales of $6 million driven by successful
promotions and customer gains in the region. The alkaline battery sales growth in these regions was tempered by
a decline of $11 million in Latin America due to decreased volumes in Brazil as a result of competitive pressures.
Sales of electric shaving and grooming products in Fiscal 2011 increased by $17 million, a 7% increase,
compared to Fiscal 2010. This increase was driven by increases of $6 million in North America, $4 million in
Europe, $3 million in Latin America and favorable foreign exchange translation of $4 million. The increases
Latin America resulted from distribution gains, whereas the increases in European and North American sales
were driven by increased online sales and distribution gains.
Electric personal care sales increased by $32 million to $248 million an increase of 15% over Fiscal 2010
sales. The $32 million Fiscal 2011 sales growth was attributable to increased North American and European sales
of $12 million and $14 million, respectively, as well as modest sales increases in Latin America coupled with
favorable foreign exchange impacts of $4 million. The sales increases in North America and Europe were both
due to a combination of successful new product launches, distribution gains in each region and increased online
sales.
Sales of portable lighting products for Fiscal 2011 increased to $92 million compared to sales of $88 million
for Fiscal 2010, an increase of 4%. The portable lighting product sales increase was primarily driven by
increased sales in North America of $7 million, which were attributable to distribution gains, including multiple
online retailers, and a successful new product line launch at a major customer, coupled with favorable foreign
exchange of $1 million. These gains were tempered by decreased sales in Latin America of $4 million driven by
competitive pressures in the region.
Segment profitability during Fiscal 2011 increased $68 million to $239 million from $171 million in Fiscal
2010. The Merger accounted for a $42 million increase in segment profit. The remaining increase in segment
profitability during Fiscal 2011 was attributable to increased sales which contributed $12 million of profit, cost
saving from integration and cost reduction initiatives of $12 million, favorable foreign exchange of $11 million
and the non-recurrence of a $18 million increase in cost of goods sold that resulted from the sale of inventory that
was revalued in connection with our adoption of fresh-start reporting upon emergence from Chapter 11 of the
Bankruptcy Code, that we recognized during the first quarter of Fiscal 2010. Partially offsetting these increases
to segment profitability was a $29 million decrease in margins resulting from higher commodity costs and
product mix. Segment profitability as a percentage of sales increased slightly to 10.6% in Fiscal 2011 compared
to 10.3% in Fiscal 2010. See “Restructuring and Related Charges” below, as well as Note 14, 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 Adjusted EBITDA in Fiscal 2011 was $307 million compared to $297 million in Fiscal 2010, an
increase of $10 million. The increase in Adjusted EBITDA is mainly driven the increased sales, cost savings and
foreign exchange impacts mentioned above, tempered by the decreased margins mentioned above.
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