Rayovac 2012 Annual Report Download - page 68

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Global Pet Supplies
2011 2010
(in millions)
Net sales to external customers ..................................................... $579 $566
Segment profit .................................................................. $ 75 $ 58
Segment profit as a % of net sales .................................................. 13.0% 10.2%
Segment Adjusted EBITDA ....................................................... $ 99 $104
Assets as of September 30, ........................................................ $828 $839
Segment sales to external customers in Fiscal 2011 increased to $579 million from $566 million in Fiscal
2010, representing an increase of $13 million or 2%. The increase of $13 million is attributable to increased
companion animal product sales of $15 million, $7 million of which was a direct result of the Merger, with the
remaining $8 million being driven by successful product launches and continued expansion in Europe, coupled
with $8 million of favorable foreign exchange. These gains were partially offset by decreased aquatics sales of
$10 million resulting from overall global macroeconomic conditions.
Segment profitability in Fiscal 2011 increased to $75 million from $58 million in Fiscal 2010. Segment
profitability as a percentage of sales in Fiscal 2011 also increased to 13.0% from 10.2% during Fiscal 2010. The
increase in segment profitability and profitability margin was primarily attributable to cost savings of $12 million
related to integration and cost reduction initiatives, in addition to the non-recurrence of a $14 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. These gains were slightly offset by decreased margins primarily due to closeout sales
during the fourth quarter of Fiscal 2011. 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 $99 million compared to $104 million in Fiscal 2010. The
decrease in Adjusted EBITDA was driven by a lower EBITDA realized from products acquired in the Merger, as
Fiscal 2010 Adjusted EBITDA includes preacquisition earnings.
Segment assets as of September 30, 2011 decreased to $828 million from $839 million at September 30,
2010. Goodwill and intangible assets, which are directly a result of the revaluation impacts of fresh-start
reporting and subsequent acquisitions, decreased to $595 million at September 30, 2011 from $602 million at
September 30, 2010. The decrease is due to a $9 million intangible impairment as well as amortization of definite
lived intangible assets of $16 million, slightly offset by increases due to acquisitions that resulted in increased
goodwill and intangible assets of $17 million.
Home and Garden Business
2011 2010
(in millions)
Net sales to external customers ..................................................... $354 $343
Segment profit .................................................................. $ 65 $ 51
Segment profit as a % of net sales .................................................. 18.4% 14.9%
Segment Adjusted EBITDA ....................................................... $ 77 $ 68
Assets as of September 30, ........................................................ $476 $496
Segment sales to external customers of home and garden control products during Fiscal 2011 increased
$11 million, or 3% versus Fiscal 2010, driven by increased household insect controls sales of $14 million, of
which $4 million related to the Merger. The remaining growth in household insect control sales was driven by
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