ITEM 6. SELECTED FINANCIAL DATA

 

The following selected historical financial data is derived from our audited consolidated financial statements. Only the most recent three fiscal years audited statements are included elsewhere in this Annual Report on Form 10-K. The following selected financial data should be read in conjunction with our consolidated financial statements and notes thereto and the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere herein.

 

     Fiscal Year Ended September 30,
     2004(1)
     2003(2)(3)
    2002(4)
    2001(5)
    2000
     (In millions, except per share data)

Statement of Operations Data:

                                    

Net sales(6)

    $ 1,417.2          $ 922.1       $ 572.7       $ 616.2    $ 630.9

Gross profit(6)

      606.1       351.5      237.4      232.9      259.4

Operating income(7)

      156.2       59.6      63.0      54.4      89.3

Income from continuing operations before income taxes(8)

      90.5       23.0      45.7      17.5      58.0

Loss from discontinued operations

      0.4       —        —        —        —  

Net income

      55.8       15.5      29.2      11.5      38.4

Restructuring and related charges—cost of goods sold

    $ (0.8 )        $ 21.1       $ 1.2       $ 22.1    $ —  

Restructuring and related charges—operating expenses

      12.2       11.5      —        0.2      —  

Non-operating expense(8)

      —         3.1      —        8.6      —  

Interest expense

    $ 65.7          $ 37.2       $ 16.0       $ 27.2    $ 30.6

Per Share Data:

                                    

Net income per common share:

                                    

Basic

    $ 1.67          $ 0.49       $ 0.92       $ 0.40    $ 1.39

Diluted

      1.61       0.48      0.90      0.39      1.32

Average shares outstanding:

                                    

Basic

      33.4       31.8      31.8      28.7      27.5

Diluted

      34.6       32.6      32.4      29.7      29.1

Cash Flow and Related Data:

                                    

Net cash provided by operating activities

    $ 104.9          $ 76.2       $ 66.8       $ 18.0    $ 32.8

Capital expenditures

      26.9       26.1      15.6      19.7      19.0

Depreciation and amortization (excluding amortization of debt issuance costs)(7)

      35.3       31.6      19.0      21.1      20.0

Balance Sheet Data (at fiscal year end):

                                    

Cash and cash equivalents

    $ 15.8          $ 107.8       $ 9.9       $ 11.4    $ 9.8

Working capital(9)

      251.9       269.8      140.5      158.5      104.7

Total assets(6)

      1,636.0       1,545.3      520.9      566.5      549.6

Total long-term debt, net of current maturities

      806.0       870.5      188.5      233.5      272.8

Total debt

      829.9       943.4      201.9      258.0      317.6

Total shareholders’ equity

      316.0       202.0      174.8      157.6      80.7
(1) Fiscal 2004 selected financial data is impacted by two acquisitions completed during the fiscal year. The Ningbo acquisition was completed on March 31, 2004 and the Microlite acquisition was completed on May 28, 2004. See further discussion of acquisitions in Item 1: Business, and in Note 16 in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

 

Fiscal 2004 includes restructuring and related charges—cost of goods sold of $(0.8) million, and restructuring and related charges—operating expenses of $12.2 million. See Note 15 the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion.

(2)

Fiscal 2003 includes a net sales reduction of $6.2 million related to North American retailer inventory repricing programs associated with the launch of our comprehensive new alkaline pricing program announced in 2003. These programs were launched in response to Duracell’s price reduction in the U.S. market on certain AA and AAA batteries.

(3) Fiscal 2003 selected financial data is impacted by two acquisitions completed during the fiscal year. The VARTA acquisition was completed on October 1, 2002 and the Remington acquisition was completed on September 30, 2003. See further discussion of acquisitions in Item 1: Business, and in Note 16 in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
(4) Fiscal 2002 includes restructuring and related charges—cost of goods sold of $1.2 million. See Note 15 in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion.
(5) Fiscal 2001 includes restructuring and related charges—cost of goods sold of $22.1 million, and restructuring and related charges—operating expenses of $0.2 million. Fiscal 2001 also includes a non-operating expense of $8.6 million discussed in (8) below.
(6) Certain reclassifications have been made to reflect the adoption of the Emerging Issues Task Force (“EITF”) No. 01-09 for periods prior to adoption in fiscal 2002. EITF 01-09 addresses the recognition, measurement and income statement classification of various types of sales incentives, either as a reduction to revenue or as an expense. Concurrent with the adoption of EITF 01-09, we reclassified certain accrued trade incentives as a contra receivable versus our previous presentation as a component of accounts payable.
(7) Pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, we ceased amortizing goodwill on October 1, 2001. Upon initial application of SFAS 142, we reassessed the useful lives of our intangible assets and deemed only the trade name to have an indefinite useful life because it is expected to generate cash flows indefinitely. Based on this, we ceased amortizing the trade name on October 1, 2001. Goodwill and trade name amortization expense for 2001 and 2000 included in depreciation and amortization in operating income are as follows:

 

     2001
    2000
     (in millions)

Goodwill amortization

      $ 1.1      $ 1.2

Trade name amortization

      2.3      2.3
    
  

Total

      $ 3.4      $ 3.5
    
  
(8) SFAS 145, which addresses, among other things, the income statement presentation of gains and losses related to debt extinguishments, requires such expenses to no longer be treated as extraordinary items, unless the items meet the definition of extraordinary per Accounting Principles Board (“APB”) Opinion No. 30. We adopted this statement on October 1, 2002. As a result, we recorded non-operating expenses within income before income taxes as follows during the fiscal years ended September 30, 2003 and 2001:

 

In fiscal 2003, a non-operating expense of $3.1 million was recorded for the write-off of unamortized debt issuance costs associated with the replacement of our previous credit facility in October 2002.

 

In fiscal 2001, a non-operating expense of $8.6 million was recorded for the premium on the repurchase of $65.0 million of our senior subordinated notes and related write-off of unamortized debt issuance costs in connection with a primary offering of our common stock in June 2001.

(9) Working capital is defined as current assets less current liabilities.