Rayovac 2011 Annual Report Download - page 78

Discontinued Operations. On November 5, 2008, the board of directors of Old Spectrum committed to the
shutdown of the growing products portion of the Home and Garden Business, which included 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 product
portion of the Home and Garden Business during Fiscal 2009. We believe the shutdown is consistent with what
we have done in other areas of our business to eliminate unprofitable products from our portfolio. We completed
this business during the second quarter of Fiscal 2009. 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, of Notes to 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. The following amounts related to the growing products portion of the Home and Garden
Business have been segregated from continuing operations and are reflected as discontinued operations during
Fiscal 2010 and Fiscal 2009, respectively (in millions):
2010 2009
Net sales ............................................................ $— $31.3
Loss from discontinued operations before income taxes ....................... $(2.5) $(90.9)
Provision for income tax benefit ......................................... 0.2 (4.5)
Loss from discontinued operations, net of tax ............................... $(2.7) $(86.4)
Liquidity and Capital Resources
Operating Activities. Net cash provided by operating activities was $227 million during Fiscal 2011
compared to $57 million during Fiscal 2010. Cash provided by operating activities from continuing operations
was $227 million during Fiscal 2011 compared to $68 million during Fiscal 2010. The $159 million increase in
cash provided by operating activities from continuing operations was primarily due to:
• Higher income from continuing operations of $105 million before income tax expense, interest expense
and non-cash impairments and;
• The non-recurrence in Fiscal 2011 of $47 million of administrative related reorganization items which
were paid in Fiscal 2010 in connection with our voluntary petitions under Chapter 11 that were filed
during Fiscal 2009 and;
• A $53 million generation of cash from working capital and other items driven by lower inventories
partially offset by lower accounts payable, partially offset by;
• Higher cash payments for interest of $29 million related primarily to interest on our 12% Notes which
was paid-in-kind during Fiscal 2010. See “Financing Activities-Senior Term Credit Facility” below, as
well as Note 7, Debt, of Notes to Consolidated Financial Statements included in this Annual Report on
Form 10-K for additional information regarding our outstanding debt and;
• Higher cash acquisition and restructuring costs of $6 million including payments related to the
integration of the Russell Hobbs business and;
• Other items totaling a use of $11 million
Cash used by operating activities from discontinued operations was de minimis in Fiscal 2011 compared to a
use of $11 million in Fiscal 2010. The operating activities of discontinued operations were related to the growing
products portion of the Home and Garden Business. See “Discontinued Operations,” above, as well as Note 16,
Discontinued Operations, of Notes to 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.
We expect to fund our cash requirements, including capital expenditures, interest and principal payments
due in Fiscal 2012 through a combination of cash on hand and cash flows from operations and available
borrowings under our ABL Revolving Credit Facility. Going forward, our ability to satisfy financial and other
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