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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 22, 2004
Rayovac Corporation
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(Exact Name of Registrant as Specified in its Charter)
Wisconsin 001-13615 22-2423556
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Six Concourse Parkway Suite 3300 Atlanta, GA 30328
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(Address of Principal Executive Offices) (Zip Code)
770-829-6200
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Registrant's telephone number,
including area code
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Press Release dated July 22, 2004 issued by Rayovac Corporation.
Item 12. Results of Operations and Financial Condition.
The following information, including the Exhibit attached hereto, is being
furnished pursuant to this Item 12 and shall not be deemed "filed" for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it
be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific reference
in such filing.
On July 22, 2004, Rayovac Corporation issued a press release discussing its
estimated financial results for its third fiscal quarter ended June 27, 2004. A
copy of the press release is furnished as Exhibit 99.1 to this report.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RAYOVAC CORPORATION
Date: July 22, 2004 By: /s/ Randall J. Steward
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Name: Randall J. Steward
Title: Executive Vice President
and Chief Financial Officer
3
EXHIBIT INDEX
Exhibit Description
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99.1 Press Release dated July 22, 2004 issued by Rayovac Corporation.
4
Exhibit 99.1
Rayovac Announces Third Quarter Fiscal 2004 Results
ATLANTA, July 22 /PRNewswire-FirstCall/ -- Rayovac Corporation (NYSE: ROV)
today announced fiscal 2004 third quarter diluted earnings per share of 36
cents and pro forma diluted earnings per share of 39 cents, in line with First
Call consensus estimates. These results compare to diluted earnings per share
of nine cents and pro forma diluted earnings per share of 31 cents for the
comparable prior year period. (Pro forma diluted EPS excludes the impact of
certain items described in further detail in this release and in the attached
Table 3, "Reconciliation of GAAP to Pro Forma Financial Data.")
"Solid sales growth from our Remington products division as well as from
our traditional battery business drove Rayovac's strong third quarter
results," said Dave Jones, chairman and CEO. "We continue to make good
progress as we near completion of the integration of Remington and initiate
plans for integration of our recent acquisitions of Ningbo Baowang in China
and Microlite in Brazil. We are very pleased with the progress we achieved
this quarter in the execution of our growth strategy and the strengthening of
our global business fundamentals."
Financial results for the third quarter and the nine months ended June 27,
2004 include results from Remington Products Company LLC, which was acquired
on September 30, 2003, Ningbo Baowang Battery Company, acquired on March 31,
2004, and Microlite S.A., acquired on May 28, 2004. Financial results for the
periods preceding the respective transaction dates exclude Remington, Ningbo
and Microlite. Net sales exclude sales from Remington retail service centers
which are presented as discontinued operations in the Condensed Consolidated
Statements of Operations for all periods presented. Throughout this release,
references are made to pro forma operating income, pro forma net income and
pro forma diluted EPS. See attached Table 3, "Reconciliation of GAAP to Pro
Forma Financial Data," for a complete reconciliation of operating income, net
income and diluted EPS on a GAAP basis to pro forma operating income, pro
forma net income and pro forma diluted EPS for the three and nine month
periods ended June 27, 2004 and the comparable periods last year.
Third Quarter Results
Third quarter net sales were $308.3 million, compared to $207.7 million
for the same period last year, representing an increase of $100.6 million, or
48 percent. Net sales increases were realized in all three geographic
regions, driven by the Remington acquisition, improved battery sales and
favorable foreign exchange rates. Remington contributed $75.9 million to
third quarter sales, Ningbo Baowang contributed $3.4 million and Microlite
contributed $2.8 million. Favorable foreign exchange rates generated
$4.2 million of the increase in sales, while growth in historical operations
accounted for the remaining $14.3 million.
Operating income, which increased to $37.5 million compared with
$12.0 million for the same period last year, benefited from the Remington
acquisition and increased profitability in North America and Europe. The
current quarter's operating results include $1.7 million in restructuring and
related costs associated with the Remington integration. Fiscal 2003 third
quarter results included $11.1 million in restructuring and related costs
associated with the acquisition of VARTA and certain North American cost
initiatives.
Pro forma operating income was $39.2 million, an increase of
$15.4 million, or 65 percent, as compared to the $23.8 million reported last
year. The increase resulted primarily from the Remington acquisition,
improved sales and the favorable impact of restructuring and cost improvement
initiatives.
Interest expense for the quarter increased to $15.6 million from
$8.5 million last year as a result of higher debt levels primarily
attributable to the Remington acquisition.
Net income for the third quarter was $12.8 million compared with net
income of $2.9 million in the prior year. Primary drivers of the increase
were the acquisition of Remington, improved battery sales, a reduction in
restructuring charges in 2004 as compared with 2003, and the favorable impact
of restructuring and cost improvement initiatives. Diluted earnings per share
were 36 cents compared to nine cents last year.
Pro forma net income was $13.9 million, a 36 percent increase as compared
with last year's $10.2 million. Pro forma diluted earnings per share were 39
cents, representing a 26 percent increase compared to pro forma diluted
earnings per share of 31 cents in the prior year. The improved net income was
the result of the Remington acquisition, increased battery sales and the
favorable impact from restructuring and cost improvement initiatives.
North American net sales were $136.3 million, up from the $81.2 million
reported last year. The $55.1 million increase was in large part due to the
Remington acquisition, which contributed net sales of $46.3 million. Total
battery sales increased 12 percent driven by strong growth in alkaline
batteries. North American segment profitability improved to $32.0 million, up
from the $14.3 million reported last year, largely due to the benefits of the
Remington acquisition, improved battery sales and the favorable impact of
restructuring and cost improvement initiatives.
European net sales were $136.7 million, versus $96.1 million reported last
year. The Remington acquisition contributed $29.6 million in net sales while
favorable foreign exchange rates and the Ningbo Baowang acquisition
contributed $6.9 million and $3.4 million, respectively. Segment
profitability for the quarter was $21.1 million, an improvement of 72 percent
compared with $12.3 million last year, largely due to the Remington
acquisition, as well as the benefit of integration initiatives implemented in
2003.
In Latin America, net sales increased to $35.3 million as compared to
$30.4 million in the third quarter last year, a 16 percent increase. Strong
sales growth across all product lines and the inclusion of $2.8 million in net
sales from Microlite drove the increase in net sales, offset by unfavorable
foreign exchange rates of $2.9 million. Latin American segment profitability
of $2.9 million declined from last year's $5.0 million as a result of foreign
exchange losses and continued political and competitive challenges in the
Andean region.
Third Quarter Net Sales Excluding Acquisitions and Foreign Exchange
North America Europe/ROW Latin America Total
(in millions)
Net sales for the
quarter ended
6/27/04 $136.3 $136.7 $35.3 $308.3
Less contributions
from acquired
companies:
Remington 46.3 29.6 - 75.9
Ningbo Baowang - 3.4 - 3.4
Microlite - - 2.8 2.8
Less impact of
foreign exchange 0.2 6.9 (2.9) 4.2
Net sales for the
quarter ended
6/27/04 as adjusted $89.8 $96.8 $35.4 $222.0
Net sales for the
quarter ended
6/29/03 $81.2 $96.1 $30.4 $207.7
Percentage growth in
net sales as adjusted 11% 1% 16% 7%
Corporate expenses were $16.8 million, up from $8.5 million for the prior
year period. The increase was primarily due to the Remington acquisition, as
well as increased compensation, new product development and legal expenses.
Nine-Month Results
Net sales for the nine months ended June 27, 2004 were $1,040.3 million, a
55 percent increase compared with $670.2 million for the prior year.
Operating income was $109.8 million, compared with $31.3 million reported last
year. The improved results were attributable to the Remington acquisition and
to a reduced level of restructuring charges recorded in 2004 as compared with
2003. Operating income for the current nine month period included a net $6.6
million expense for restructuring and related costs associated with the
integration of acquisitions. For the comparable period in fiscal 2003,
operating results included $31.6 million in restructuring and other related
costs, reflecting the impact of the VARTA consumer battery business
integration and other global initiatives.
Pro forma operating income was $116.4 million, a 79 percent increase
versus the $65.2 million in 2003. The $51.2 million increase was primarily
attributable to the Remington acquisition, improved battery sales and the
benefit of restructuring initiatives implemented in 2003.
Interest expense rose to $49.0 million from $28.1 million last year,
primarily as a result of higher debt levels associated with the Remington
acquisition.
Net income for the nine-month period was $37.6 million compared with
$2.6 million in the prior year. The $35.0 million increase was primarily
attributable to the Remington acquisition and increased battery sales as well
as the reduction in restructuring charges from $31.6 million in 2003 to
$6.6 million in 2004. Diluted earnings per share for the nine-month period
were $1.09 in 2004 compared to eight cents in 2003.
Pro forma net income was $42.0 million versus $25.5 million reported last
year, an increase of $16.5 million, or 65 percent. The increase is primarily
attributable to the Remington acquisition, increased battery sales and the
favorable impact of restructuring initiatives implemented in 2003. Pro forma
diluted earnings per share for the nine-month period were $1.22 compared to
pro forma diluted earnings per share of 78 cents for the same period last
year, representing a 56 percent improvement.
North American net sales for the nine-month period were $484.5 million,
compared with $267.3 million reported last year. The $217.2 million increase
was largely due to the impact of the Remington acquisition, which contributed
sales of $193.4 million, and strong battery sales led by a 12 percent growth
in alkaline batteries. North American alkaline battery sales represented
17 percent of consolidated global net sales. North American segment
profitability was $85.6 million, an increase from $45.0 million reported last
year. The profitability improvement reflects the inclusion of results from
the Remington acquisition, increased battery sales and the favorable impact of
restructuring and cost improvement initiatives.
European net sales were $453.4 million versus $312.4 million reported last
year. This $141.0 million increase in net sales was due to the Remington
acquisition, which contributed $100.4 million, favorable foreign exchange
rates, which contributed $46.2 million, and the Ningbo Baowang acquisition,
which contributed $3.4 million. Segment profitability increased to
$74.2 million, largely due to the benefits of the Remington acquisition and
the favorable impact of the recently completed VARTA integration initiatives.
In Latin America, net sales increased to $102.4 million from $90.5 million
in the prior year period, a 13 percent improvement. Strong battery sales
growth throughout the region was offset by a $9.7 million impact from
unfavorable exchange rates. Latin American segment profitability was $9.0
million compared to $10.9 million last year. The decline was primarily the
result of foreign exchange losses coupled with continued political and
competitive challenges in the Andean region.
Nine Months Net Sales Excluding Acquisitions and Foreign Exchange
North America Europe/ROW Latin America Total
(in millions)
Net sales for the
nine months ended
6/27/04 $484.5 $453.4 $102.4 $1,040.3
Less contributions
from acquired companies:
Remington 193.4 100.4 - 293.8
Ningbo Baowang - 3.4 - 3.4
Microlite - - 2.8 2.8
Less impact of
foreign exchange 2.0 46.2 (9.7) 38.5
Net sales for the nine
months ended 6/27/04
as adjusted $289.1 $303.4 $109.3 $701.8
Net sales for the
nine months ended
6/29/03 $267.3 $312.4 $90.5 $670.2
Percentage growth in
net sales as adjusted 8% (3%) 21% 5%
Corporate expenses increased to $52.4 million as compared with
$28.8 million for the same period last year. The increase was primarily due to
the inclusion of Remington research and development costs, as well as
increased compensation, new product development costs and legal expenses.
Total debt as of June 27, 2004 was $845.8 million, a reduction of
$97.6 million since September 30, 2003. Included in the debt reduction was
the retirement of the remaining $56.0 million of outstanding Remington notes
and a $113.6 million reduction in the senior credit facilities. Partially
offsetting this decrease were additional borrowings and assumed debt, net of
cash, totaling $62.1 million related to the Ningbo Baowang and Microlite
acquisitions. The unfavorable currency exchange rate impact on debt as of
June 27, 2004 was $9.9 million.
Acquisition of Ningbo Baowang Battery Company
On March 31, 2004, the Company completed its acquisition of an 85 percent
equity interest in Ningbo Baowang Battery Company of Ninghai, China. The
financial results of the Ningbo acquisition were reported as part of Rayovac's
consolidated results in the fiscal third quarter of 2004. Ningbo Baowang
contributed $3.4 million in net sales to Rayovac's third quarter results, and
had an insignificant impact on net income.
Acquisition of Microlite, S.A.
On May 28, 2004, Rayovac finalized its acquisition of Microlite, S.A., the
largest independent consumer battery company in Brazil. The financial results
of the Microlite acquisition were reported as part of Rayovac's consolidated
third quarter results for the one month period subsequent to the closing of
the transaction. Microlite contributed $2.8 million to Rayovac's third
quarter net sales, and recorded a small operating loss.
Restructuring Initiatives
On January 13, 2004 the Company announced plans to integrate Remington's
operations. The status of those global integration initiatives follows:
-- The integration of Remington's North American operations into
Rayovac's existing business structure was substantially complete as of
the beginning of the third quarter of fiscal 2004.
-- The consolidation of Remington's European operations into Rayovac's
European business unit was substantially complete as of the end of the
third quarter.
-- Remington's and Rayovac's North American and European distribution
facilities have been consolidated as of the end of the third quarter.
-- Rayovac and Remington research and development functions have been
merged into a single corporate research facility in Madison, WI. In
addition, a new global product innovation team has been organized and
is functioning to develop future product innovations across all of the
Company's product categories.
-- The Remington manufacturing operations in Bridgeport, CT, are being
consolidated into Rayovac's manufacturing facility in Portage, WI,
with the Bridgeport plant closing by December 31, 2004.
When fully implemented, annualized savings from the Remington integration
initiatives are estimated in the $30-$35 million range. Restructuring and
related costs of $10-$11 million are expected to impact earnings during fiscal
2004 with one time cash costs of approximately $35 million, the majority of
which will be spent in calendar 2004.
Remington Service Centers
The Company has reflected Remington's retail service centers in the United
States and United Kingdom as discontinued operations. These service centers
were closed during fiscal 2004 as part of the Remington integration
initiatives, with the process reaching completion during the fiscal third
quarter. No further financial impact from discontinued operations is
expected.
Financial Outlook
Management's expectations for net sales for the fiscal year ending
September 30, 2004 are in the range of $1.35 to $1.40 billion. Management is
raising guidance for pro forma diluted earnings per share for fiscal 2004 to
within a range of $1.78 to $1.81. For fiscal 2005, preliminary estimates
indicate that diluted earnings per share will fall in a range of $2.05 to
$2.10.
Non-GAAP Measurements
To assist investors in the reconciliation of GAAP financial reporting to
pro forma results, which present operating results on a basis excluding
adjustments, the Company provides information on its website detailing all the
items that historically reconcile its GAAP versus pro forma financial
statements. The information can be found at http://www.rayovac.com under
Investor Relations. A reconciliation of GAAP to pro forma financial data is
also included as Table 3 of this press release.
Rayovac's management, and certain investors, use these pro forma results
of operations to help measure the Company's current and future financial
performance and to identify trends in its financial condition and results of
operations. Management believes the pro forma results provide useful
supplemental information to assist investors in analyzing the Company's
financial position and results of operations. However, pro forma results do
not replace the presentation of the Company's GAAP financial results and
should be read in conjunction with those GAAP results. The Company chooses to
provide this information to investors to assist in the meaningful comparison
of past, present and future operating results and as a means to identify the
results of on-going core operations.
Rayovac Corporation is a global consumer products company with a diverse
portfolio of world-class brands, including Rayovac, VARTA and Remington. The
Company holds many leading market positions including: the top selling
rechargeable battery brand in North America and Europe; the world's leader in
hearing aid batteries; and the number one selling brand of men's and women's
foil electric shavers in North America. Rayovac markets its products in more
than 100 countries and trades on the New York Stock Exchange under the symbol
"ROV."
Certain matters discussed in this news release, with the exception of
historical matters, are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are subject
to a number of risks, uncertainties and other factors that could cause results
to differ materially from those anticipated as of the date of this release.
Actual results may differ materially from these statements as a result of (1)
changes in external competitive market factors, such as introduction of new
product features or technological developments, development of new competitors
or competitive brands, or competitive promotional activity or spending, (2)
changes in consumer demand for the various types of products offered by
Rayovac, (3) changes in the general economic conditions where we do business,
such as stock market prices, interest rates, currency exchange rates,
inflation and raw material costs, (4) our ability to successfully implement
manufacturing, distribution and other cost efficiencies and integrate our
recent acquisitions, (5) various other factors, including those discussed
herein and those set forth in Rayovac's most recently filed Form 10-Q and
Annual Report on Form 10-K.
Table 1
RAYOVAC Corporation
Condensed Consolidated Statements of Operations
For the three month periods ended June 27, 2004 and June 29, 2003
(Unaudited)
(In millions, except per share amounts)
THREE MONTHS NINE MONTHS
% %
F2004 F2003 INC/(DEC) F2004 F2003 INC/(DEC)
Net sales $308.3 $207.7 48.4% $1,040.3 $670.2 55.2%
Cost of goods
sold 173.6 117.5 590.8 395.6
Restructuring and
related charges - 10.4 (1.1) 21.7
Gross profit 134.7 79.8 68.8% 450.6 252.9 78.2%
Selling 61.0 42.3 219.8 137.8
General and
administrative 28.3 21.2 97.9 62.3
Research and
development 6.2 3.6 15.4 11.6
Restructuring and
related charges 1.7 0.7 7.7 9.9
Total operating
expenses 97.2 67.8 340.8 221.6
Operating income 37.5 12.0 212.5% 109.8 31.3 250.8%
Interest expense 15.6 8.5 49.0 28.1
Non-operating
expense - - - 3.1(a)
Other expense
(income), net 1.3 (0.8) (0.3) (3.7)
Income from
continuing
operations
before income
taxes 20.6 4.3 61.1 3.8
Income tax expense 7.8 1.4 23.2 1.2
Income from
continuing
operations 12.8 2.9 37.9 2.6
Loss from
discontinued
operations, net
of tax -(b) - (0.3)(b) -
Net income $12.8 $2.9 $37.6 $2.6
Average shares
outstanding 33.6 31.9 33.0 31.8
Basic EPS:
Income from
continuing
operations $0.38 $0.09 $1.15 $0.08
Discontinued
operations - - (0.01) -
Basic earnings
per share $0.38 $0.09 $1.14 $0.08
Average shares
and common stock
equivalents
outstanding 35.4 32.5 34.4 32.5
Diluted EPS:
Income from
continuing
operations $0.36 $0.09 $1.10 $0.08
Discontinued
operations - - (0.01) -
Diluted earnings
per share $0.36 $0.09 $1.09 $0.08
(a) The nine-month period ended June 29, 2003 reflects the write-off of
unamortized debt issuance costs of $3.1 million attributable to the
refinancing of the Company's credit facility as part of the VARTA
acquisition.
(b) The three- and nine-month periods ended June 27, 2004 reflect the
after-tax net income of the Remington retail service centers, which the
Company is reporting as a discontinued operation at the end of the period.
Table 2
RAYOVAC CORPORATION
Supplemental Financial Data
For the three and nine month periods ended June 27, 2004 and June 29, 2003
(Unaudited)
(In millions, except per share amounts)
Supplemental Financial Data F2004 F2003
Cash $17.8 $10.3
Trade receivables, net $256.6 $171.0
Days Sales Outstanding (a) 76 75
Inventory, net $220.8 $155.9
Inventory Turnover (b) 3.1 3.0
Total Debt $845.8 $492.9
LTM EBITDA (pro forma including
Remington, Ningbo Baowang and
Microlite) $188.4
THREE MONTHS NINE MONTHS
Supplemental Cash Flow Data F2004 F2003 F2004 F2003
Depreciation and amortization,
excluding amortization of debt
issuance costs $8.4 $7.4 $25.3 $23.9
Capital expenditures $7.5 $6.7 $17.1 $17.4
Supplemental Segment Sales & THREE MONTHS NINE MONTHS
Profitability F2004 F2003 F2004 F2003
Net Sales
North America $136.3 $81.2 $484.5 $267.3
Europe/ROW 136.7 96.1 453.4 312.4
Latin America 35.3 30.4 102.4 90.5
Total net sales $308.3 $207.7 $1,040.3 $670.2
Segment Profit
North America $32.0 $14.3 $85.6 $45.0
Europe/ROW 21.1 12.3 74.2 35.8
Latin America 2.9 5.0 9.0 10.9
Total segment profit $56.0 $31.6 $168.8 $91.7
Corporate 16.8 8.5 52.4 28.8
Restructuring and related charges 1.7 11.1 6.6 31.6
Interest expense 15.6 8.5 49.0 28.1
Non-operating expense - - - 3.1
Other expense (income), net 1.3 (0.8) (0.3) (3.7)
Income from continuing operations
before income taxes $20.6 $4.3 $61.1 $3.8
(a) - Reflects receivables, net divided by average daily sales during
the quarter.
(b) - Reflects cost of sales (excluding restructuring and related
charges) divided by net inventories multiplied by four.
Table 3
RAYOVAC CORPORATION
Reconciliation of GAAP to Pro Forma Financial Data
For the three month periods ended June 27, 2004 and June 29, 2003
(Unaudited)
(In millions, except per share amounts)
THREE MONTHS
2004 2003
As Adjust- As As Adjust- As
reported ments Adjusted reported ments Adjusted
Net sales (a) $308.3 - $308.3 $207.7 $0.7 $208.4
Gross profit (a), (b) 134.7 - 134.7 79.8 11.1 90.9
Gross profit % of sales 43.7% 43.7% 38.4% 43.6%
Operating expenses (b) 97.2 1.7 95.5 67.8 0.7 67.1
Operating income (c) 37.5 1.7 39.2 12.0 11.8 23.8
Operating income % of sales 12.2% 12.7% 5.8% 11.4%
Income from continuing
operations before income
taxes 20.6 1.7 22.3 4.3 11.8 16.1
Income from continuing
operations 12.8 1.1 13.9 2.9 7.3 10.2
Loss from discontinued
operations, net of tax (d) - - - - - -
Net income $12.8 $ 1.1 $13.9 $ 2.9 $ 7.3 $10.2
Basic earnings per share $0.38 $0.03 $0.41 $0.09 $0.23 $0.32
Diluted earnings per share $0.36 $0.03 $0.39 $0.09 $0.22 $0.31
(a) For Fiscal 2003, reflects the impact of North America retailer
repricing programs of approximately $0.7 million associated with the
Company's alkaline pricing program announced in the second quarter of
Fiscal 2003.
(b) For Fiscal 2003, reflects the impact of initiatives related to the
integration of the VARTA consumer battery business and other global
restructuring initiatives, including the closure of the Company's Mexico
City, Mexico plant and consolidation of the Madison, Wisconsin packaging
facility and Middleton, Wisconsin distribution center into a combined
facility in Dixon, Illinois. See our Form 10-Q for the period ended June
29, 2003 for additional information.
(c) For Fiscal 2004, includes Remington integration initiatives, including
stay bonuses, relocation costs to combine Rayovac's and Remington's
distribution centers, the new Corporate headquarters in Atlanta, Georgia,
and changes in estimates following completion of 2003 initiatives.
For Fiscal 2003, includes the adjustments discussed in footnotes (a) and
(b) and the write-off of unamortized debt issuance costs of $3.1 million
attributable to the refinancing of the Company's credit facility as part
of the VARTA acquisition. Details may be found in our report on Form 10-Q
for the period ended June 29, 2003.
(d) For Fiscal 2004, reflects the after-tax net income of the Remington
retail service centers which the Company is treating as a discontinued
operation at the end of the period. Amounts incurred during the quarter
ended June 27, 2004 were not significant.
Table 3 continued
RAYOVAC CORPORATION
Reconciliation of GAAP to Pro Forma Financial Data
For the nine month periods ended June 27, 2004 and June 29, 2003
(Unaudited)
(In millions, except per share amounts)
NINE MONTHS
2004 2003
As Adjust- As As Adjust- As
reported ments Adjusted reported ments Adjusted
Net sales (a) $1,040.3 - $1,040.3 $670.2 $2.3 $672.5
Gross profit (a), (b) 450.6 (1.1) 449.5 252.9 24.0 276.9
Gross profit % of sales 43.3% 43.2% 37.7% 41.2%
Operating expenses (b) 340.8 7.7 333.1 221.6 9.9 211.7
Operating income (c) 109.8 6.6 116.4 31.3 33.9 65.2
Operating income % of
sales 10.6% 11.2% 4.7% 9.7%
Income from continuing
operations before
income taxes 61.1 6.6 67.7 3.8 37.0 40.8
Income from continuing
operations 37.9 4.1 42.0 2.6 22.9 25.5
Income from discontinued
operations, net of tax (d) (0.3) 0.3 - - - -
Net income $37.6 $ 4.4 $42.0 $ 2.6 $22.9 $25.5
Basic earnings per share $1.14 $0.13 $1.27 $0.08 $0.72 $0.80
Diluted earnings per
share $1.09 $0.13 $1.22 $0.08 $0.70 $0.78
(a) For Fiscal 2003, reflects the impact of North America retailer
repricing programs of approximately $2.3 million associated with the
Company's new alkaline pricing program announced in the second quarter of
Fiscal 2003.
(b) For Fiscal 2004, reflects the completion of last year's global
restructuring initiatives and the impact of initiatives related to the
integration of the Remington business.
For Fiscal 2003, reflects the impact of initiatives related to the
integration of the VARTA consumer battery business and other global
initiatives. Details may be found in our report on Form 10-Q for the
period ended June 29, 2003.
(c) For Fiscal 2004, includes Remington integration initiatives, including
stay bonuses, relocation costs to combine Rayovac's and Remington's
distribution centers, the new Corporate headquarters in Atlanta, Georgia,
and changes in estimates following completion of 2003 initiatives.
For Fiscal 2003, includes the adjustments discussed in footnotes (a) and
(b) and the write-off of unamortized debt issuance costs of $3.1 million
attributable to the refinancing of the Company's credit facility as part
of the VARTA acquisition. Details may be found in our Form 10-Q for the
period ended June 29, 2003.
(d) For Fiscal 2004, reflects the after-tax net income of the Remington
retail service centers which the Company is reporting as a discontinued
operation at the end of the period. Amounts incurred during the quarter
ended June 27, 2004 were not significant.
Table 4
RAYOVAC CORPORATION
Pro Forma Net Sales Comparison
For the three months ended June 27, 2004 and June 29, 2003
(Unaudited)
(In millions)
Fiscal 2004 Fiscal 2003
Total Rayovac Pro-
as as Forma
Rayovac Remington Reported Reported Remington Total
North America $90.0 $46.3 $136.3 $81.2 $44.0 $125.2
Europe/ROW 107.1 29.6 136.7 96.1 18.7 114.8
Latin America 35.3 - 35.3 30.4 - 30.4
Total Net Sales $232.4 $75.9 $308.3 $207.7 $62.7 $270.4
Pro Forma Net Sales Comparison
For the nine months ended June 27, 2004 and June 29, 2003
(Unaudited)
(In millions)
Fiscal 2004 Fiscal 2003
Total Rayovac Pro-
as as Forma
Rayovac Remington Reported Reported Remington Total
North America $291.1 $193.4 $484.5 $267.3 $177.5 $444.8
Europe/ROW 353.0 100.4 453.4 312.4 72.4 384.8
Latin America 102.4 - 102.4 90.5 - 90.5
Total Net Sales $746.5 $293.8 $1,040.3 $670.2 $249.9 $920.1
Note: Excludes Remington service centers in all periods presented.
Table 5
RAYOVAC CORPORATION
Reconciliation of GAAP EPS Guidance to Pro Forma EPS Guidance
For Fiscal Year Ended September 30, 2004
EPS Range
Diluted Earnings Per Share $1.58 - $1.60
Pro Forma Adjustments:
Restructuring Charges, Net of Tax $0.19-$0.20
Discontinued Operations, Net of Tax $0.01
Pro Forma Diluted Earnings Per Share $1.78 - $1.81
SOURCE Rayovac Corporation
-0- 07/22/2004
/CONTACT: Nancy O'Donnell of Rayovac Corporation, +1-770-829-6208/
/Web site: http://www.rayovac.com /
(ROV)
CO: Rayovac Corporation
ST: Georgia
IN: CHM
SU: ERN ERP