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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 28, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 333-17895
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Rayovac Corporation
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(Exact name of registrant as specified in its charter)
Wisconsin 22-2423556
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
601 Rayovac Drive, Madison, Wisconsin 53711
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(Address of principal executive offices) (Zip Code)
(608) 275-3340
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes ( ) No ( X )
The number of shares outstanding of the Registrant's common stock, $.01 par
value, as of June 3, 1997, the most recent practicable date, was 20,581,431.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
RAYOVAC CORPORATION
Condensed Consolidated Balance Sheets
As of December 28, 1996 and September 30, 1996
(In thousands, except per share amounts)
-ASSETS-
December 28, 1996 September 30, 1996
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $4,875 $4,255
Receivables 80,050 66,476
Inventories 50,488 70,121
Prepaid expenses and other 12,166 14,822
--------- ---------
Total current assets 147,579 155,674
Property, plant and equipment, net 68,039 69,397
Deferred charges and other 18,952 20,177
--------- ---------
Total assets $234,570 $245,248
========= =========
-LIABILITIES AND SHAREHOLDERS' DEFICIT-
Current liabilities:
Current maturities of long-term debt $11,019 $8,818
Accounts payable 41,117 46,921
Accrued liabilities:
Wages and benefits and other 34,593 21,798
Recapitalization and other
special charges 11,895 14,942
--------- ---------
Total current liabilities 98,624 92,479
Long-term debt, net of
current maturities 203,881 224,845
Employee benefit obligations,
net of current portion 12,875 12,138
Other 1,474 1,506
Shareholders' deficit:
Common stock, $.01 par value,
authorized 90,000 shares;
issued 50,000 shares; outstanding
20,470 shares 500 500
Additional paid-in capital 15,970 15,970
Foreign currency translation adjustment 2,745 1,689
Note receivable officer/shareholder (500) (500)
Retained earnings 27,523 25,143
--------- ---------
46,238 42,802
Less treasury stock, at cost,
29,530 shares (128,522) (128,522)
--------- ---------
Total shareholders' deficit (82,284) (85,720)
--------- ---------
Total liabilities and
shareholders' deficit $234,570 $245,248
========= =========
See accompanying notes which are an integral part of these statements.
RAYOVAC CORPORATION
Condensed Consolidated Statements of Operations
For the three-month periods ended December 28, 1996 and December 30, 1995
(Unaudited)
(In thousands, except per share amounts)
1996 1995
---- ----
Net sales $130,004 $129,952
Cost of goods sold 79,019 77,488
--------- ---------
Gross profit 50,985 52,464
Selling 26,762 30,804
General and administrative 7,604 8,680
Research and development 1,910 1,329
Other special charges 2,963 --
---------- ---------
Total operating expenses 39,239 40,813
Income from operations 11,746 11,651
Other expense:
Interest expense 7,974 2,166
Other expense 14 228
--------- ---------
7,988 2,394
Income before income taxes 3,758 9,257
Income taxes 1,378 3,198
--------- ---------
Net income $2,380 $6,059
========= =========
Net income per share $0.12 $0.12
========= =========
Average shares outstanding 20,470 49,571
========= =========
See accompanying notes which are an integral part of these statements.
RAYOVAC CORPORATION
Condensed Consolidated Statements of Cash Flows
For the three-month periods ended December 28, 1996 and December 30, 1995
(Unaudited)
(In thousands)
1996 1995
---- ----
Cash flows from operating activities:
Net income $2,380 $6,059
Non-cash adjustments to net income:
Amortization 2,373 17
Depreciation 3,060 3,225
Net changes in other assets and liabilities 12,717 4,899
--------- -------
Net cash provided by operating activities 20,530 14,200
Cash flows from investing activities:
Purchases of property, plant and equipment (1,142) (1,730)
--------- -------
Net cash used in investing activities (1,142) (1,730)
Cash flows from financing activities:
Reduction of debt (129,412) (38,177)
Proceeds from debt financing 110,768 30,081
Distribution from Rayovac International Corporation,
a domestic international sales company -- (3,587)
Other (119) (533)
--------- -------
Net cash used in financing activities (18,763) (12,216)
--------- -------
Effect of exchange rate changes on cash
and cash equivalents (5) (10)
--------- -------
Net increase in cash and cash equivalents 620 244
Cash and cash equivalents, beginning of period 4,255 2,431
--------- -------
Cash and cash equivalents, end of period $4,875 $2,675
========= =======
See accompanying notes which are an integral part of these statements.
RAYOVAC CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
1 SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: These financial statements have been prepared by
Rayovac Corporation (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission (the "SEC") and,
in the opinion of the Company, include all adjustments (all of which are
normal and recurring in nature) necessary to present fairly the financial
position of the Company at December 28, 1996, results of operations and
cash flows for the three month periods ended December 28, 1996 and December
30, 1995. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such SEC
rules and regulations.
The condensed consolidated balance sheet at September 30, 1996, has been
derived from the annual audited financial statements. It is suggested that
these condensed consolidated financial statements should be read in
conjunction with the audited financial statements and notes thereto as of
September 30, 1996.
2 INVENTORIES
Inventories consist of the following (in thousands):
Dec. 28, 1996 Sept. 30, 1996
------------- --------------
Raw material $16,055 $21,325
Work-in-process 14,668 19,622
Finished goods 19,765 29,174
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$50,488 $70,121
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3 COMMITMENTS AND CONTINGENCIES
The Company has entered into agreements to purchase certain equipment and
to pay annual royalties. In a December 1991 agreement, the Company
committed to pay annual royalties of $1,500,000 for the first five years,
beginning in 1993, plus $500,000 for each year thereafter, as long as the
related equipment patents are enforceable (2012). In a March 1994
agreement, the Company committed to pay annual royalties of $500,000 for
five years beginning in 1995. Additionally, the Company has committed to
purchase tooling of $2,345,000 related to this equipment at an unspecified
date in the future and $420,000 of manganese ore by March 1998.
The Company has provided for the estimated costs associated with
environmental remediation activities at some of its current and former
manufacturing sites. In addition, the Company, together with other parties,
has been designated a potentially responsible party of various third-party
sites on the United States EPA National Priorities List (Superfund). The
Company provides for the estimated costs of investigation and remediation
of these sites when the amounts can be reasonably estimated. The actual
cost incurred may vary from these estimates due to the inherent
uncertainties involved. The Company believes that any additional liability
in excess of the amounts provided of $1.8 million, which may result from
resolution of these matters, will not have a material adverse effect on the
financial condition, liquidity, or cash flows of the Company.
4 GUARANTOR SUBSIDIARY
The following condensed consolidating financial data illustrates the
composition of the consolidated financial statements. Investments in
subsidiaries are accounted for by the Company on an unconsolidated basis
and the Guarantor Subsidiary using the equity method for purposes of the
consolidating presentation. Earnings of subsidiaries are therefore
reflected in the Company's and Guarantor Subsidiary's investment accounts
and earnings. The principal elimination entries eliminate investments in
subsidiaries and intercompany balances and transactions. Separate financial
statements of the Guarantor Subsidiary are not presented because management
has determined that such financial statements would not be material to
investors.
RAYOVAC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of December 28, 1996
(Unaudited)
(In thousands)
-ASSETS-
Guarantor Nonguarantor Consolidated
Parent Subsidiary Subsidiaries Eliminations Total
--------- ---------- ------------ ------------ ------------
Current assets:
Cash and cash equivalents $2,940 $57 $1,878 -- $4,875
Receivables 69,246 88 20,696 (9,980) 80,050
Inventories 36,766 -- 14,423 (701) 50,488
Prepaid expenses and other 10,515 180 1,471 -- 12,166
--------- --------- -------- --------- ---------
Total current assets 119,467 325 38,468 (10,681) 147,579
Property, plant and equipment, net 60,604 -- 7,435 -- 68,039
Deferred charges and other 16,925 -- 2,027 -- 18,952
Investment in subsidiaries 13,262 13,169 -- (26,431) --
--------- --------- -------- --------- ---------
Total assets $210,258 $13,494 $47,930 ($37,112) $234,570
========= ========= ======== ========= =========
-LIABILITIES AND SHAREHOLDERS' DEFICIT-
Current liabilities:
Current maturities of long-term debt $4,500 -- $6,519 -- $11,019
Accounts payable 34,751 -- 16,034 (9,668) 41,117
Accrued liabilities: -- -- --
Wages and benefits and other 27,434 26 7,133 -- 34,593
Recapitalization and other special charges 7,601 -- 4,294 -- 11,895
--------- --------- -------- --------- ---------
Total current liabilities 74,286 26 33,980 (9,668) 98,624
Long-term debt, net of current maturities 203,100 -- 781 -- 203,881
Employee benefit obligations, net of current portion 12,875 -- -- -- 12,875
Other 1,268 206 -- -- 1,474
Shareholders' deficit:
Common stock 500 -- 12,072 (12,072) 500
Additional paid-in capital 15,970 3,525 750 (4,275) 15,970
Foreign currency translation adjustment 2,745 2,745 2,745 (5,490) 2,745
Note receivable officer/shareholder (500) -- -- -- (500)
Retained earnings 28,536 6,992 (2,398) (5,607) 27,523
--------- --------- -------- --------- ---------
Less treasury stock (128,522) -- -- -- (128,522)
--------- --------- -------- --------- ---------
Total shareholders' deficit (81,271) 13,262 13,169 (27,444) (82,284)
--------- --------- -------- --------- ---------
Total liabilities and shareholders' deficit $210,258 $13,494 $47,930 ($37,112) $234,570
========= ========= ======== ========= =========
RAYOVAC CORPORATION
Condensed Consolidating Statements of Operations
For the three-month period ended December 28, 1996
(Unaudited)
(In thousands)
Guarantor Nonguarantor Consolidated
Parent Subsidiary Subsidiaries Eliminations Total
--------- ---------- ------------ ------------ ------------
Net sales $114,104 $-- $23,677 ($7,777) $130,004
Cost of goods sold 70,435 -- 16,366 (7,782) 79,019
--------- ------ ------- -------- --------
Gross profit 43,669 -- 7,311 5 50,985
Selling 23,124 -- 3,638 -- 26,762
General and administrative 6,003 (190) 1,786 5 7,604
Research and development 1,910 -- -- -- 1,910
Other special charges 1,500 -- 1,463 -- 2,963
--------- ------ ------- -------- --------
Total operating expenses 32,537 (190) 6,887 5 39,239
Income from operations 11,132 190 424 -- 11,746
Other expense:
Interest expense 7,805 -- 169 -- 7,974
Equity in profit of subsidiary (150) (15) -- 165 --
Other expense (340) (17) 371 -- 14
--------- ------ ------- -------- --------
Income before income taxes 3,817 222 (116) (165) 3,758
Income taxes 1,437 72 (131) -- 1,378
--------- ------ ------- -------- --------
Net income $2,380 $150 $15 ($165) $2,380
========= ====== ======= ======== ========
RAYOVAC CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
For the three-month period ended December 28, 1996
(Unaudited)
(In thousands)
Guarantor Nonguarantor Consolidated
Parent Subsidiary Subsidiaries Eliminations Total
--------- ---------- ------------ ------------ ------------
Net cash provided by operating activities $21,234 $-- ($704) $-- $20,530
Cash flows from investing activities:
Purchases of property, plant and equipment (929) -- (213) -- (1,142)
---------- ----- ------- ---- -------------
Net cash used in investing activities (929) -- (213) -- (1,142)
Cash flows from financing activities:
Reduction of debt (128,189) -- (1,223) -- (129,412)
Proceeds from debt financing 107,841 -- 2,927 -- 110,768
Other -- -- (119) -- (119)
---------- ----- -------- ----- -------------
Net cash used in financing activities (20,348) -- 1,585 -- (18,763)
---------- ----- -------- ----- -------------
Effect of exchange rate changes on cash
and cash equivalents -- -- (5) -- (5)
---------- ----- --------- ----- -------------
Net increase in cash and cash equivalents (43) -- 663 -- 620
Cash and cash equivalents, beginning of period 2,983 57 1,215 4,255
---------- ----- -------- ----- -------------
Cash and cash equivalents, end of period $2,940 $57 $1,878 $-- $4,875
========== ===== ======== ===== =============
Signatures
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 thereunto duly authorized.
DATE: June 3, 1997
RAYOVAC CORPORATION
By /s/ Kent J. Hussey
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Kent J. Hussey
Chief Financial Officer
By /s/ James A. Broderick
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James A. Broderick
Vice President