Rayovac 2012 Annual Report Download - page 58

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2012. Excluding foreign exchange impacts, small appliances sales increased $8 million. Geographically, small
appliance sales increased $16 million in Latin America and $12 million in Europe, tempered by a $19 million
decrease in North American small appliance sales. Latin American sales gains were attributable to price
increases, distribution gains with existing customers and new customer gains, whereas European sales increases
resulted from market share gains in the United Kingdom and expansion of the Russell Hobbs brand throughout
Europe. The decline in North American small appliances sales resulted from a concerted effort to eliminate
certain low margin promotions.
Segment profitability during Fiscal 2012 increased $5 million to $244 million from $239 million in Fiscal
2011. Segment profitability as a percentage of net sales increased slightly to 10.8% in Fiscal 2012 compared to
10.6% in Fiscal 2011. The increase is primarily attributable to favorable changes in product mix, and synergies
recognized following the Merger, tempered by decreased sales and increased commodity prices.
Segment Adjusted EBITDA in Fiscal 2012 remained flat at $307 million, due to favorable changes in
product mix which were offset by decreased sales and increased commodity costs.
Segment assets at September 30, 2012 decreased to $2,243 million from $2,275 million at September 30,
2011 primarily resulting from the amortization of intangible assets. Goodwill and intangible assets, which are
directly a result of the revaluation impacts of fresh-start reporting and subsequent acquisitions, decreased to
$1,261 million at September 30, 2012 from $1,295 million at September 30, 2011.
Global Pet Supplies
2012 2011
(in millions)
Net sales to external customers ................................................... $615 $579
Segment profit ................................................................ $ 86 $ 75
Segment profit as a % of net sales ................................................ 14.0% 13.0%
Segment Adjusted EBITDA ..................................................... $113 $ 99
Assets as of September 30, ...................................................... $956 $828
Segment sales to external customers in Fiscal 2012 increased to $615 million from $579 million in Fiscal
2011, representing an increase of $36 million or 6%, driven by increased companion animal sales and aquatics
sales of $34 million and $11 million, respectively. Companion animal sales increases resulted from the
FURminator acquisition in Fiscal 2012, which contributed $30 million in sales, and expansion of the Nature’s
Miracle brand in the U.S. Strong North American aquarium starter kits and pond related sales drove the increase
in aquatics sales, which was tempered by lower European aquatics sales. Foreign exchange negatively impacted
Fiscal 2012 pet supplies sales by $8 million.
Segment profitability increased $11 million in Fiscal 2012 to $86 million from $75 million in Fiscal 2011.
Segment profitability as a percentage of sales in Fiscal 2012 also increased to 14.0% from 13.0% during Fiscal
2011. The increase in segment profit is attributable to increased sales and North American pricing improvements
in Fiscal 2012, partially offset by negative foreign exchange impacts and a slowing European economy. The
higher segment profit as a percentage of sales is primarily a result of the acquisition of FURminator which
contributes a higher margin compared to other products within the segment, coupled with savings from our
restructuring initiatives. 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 2012 increased $14 million, to $113 million, from $99 million in
Fiscal 2011. The increase in Adjusted EBITDA is due to the factors driving increased segment profitability
discussed above.
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