Rayovac Corporation and Subsidiaries
The Company believes adjusting for unusual items in the Company’s results provides useful information regarding the Company’s ability to service its indebtedness and facilitates investors’ and analysts’ ability to evaluate the Company’s operations excluding these unusual items. However, the following factors should be considered in evaluating such measures: Adjusted Net Income and other related adjusted financial measures (i) should not be considered in isolation, (ii) are not measures of performance calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), (iii) should not be construed as alternatives or substitutes for income from operations, net income or cash flows from operating activities in analyzing the Company’s operating performance, financial position or cash flows (in each case, as determined in accordance with GAAP) and (iv) should not be used as indicators of the Company’s operating performance or measures of its liquidity. Additionally, because all companies do not calculate Adjusted Net Income and related adjusted financial measures in a uniform fashion, the calculations presented herein may not be comparable to other similarly titled measures of other companies.
| (1) |
In fiscal 2002, the Company adopted
the provisions of Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets, which requires that goodwill and
intangible assets with indefinite useful lives no longer be amortized.
See also Note 5 in the Notes to Consolidated Financial Statements and
the Management’s Discussion and Analysis for more information. |
| (2) |
The Company recorded Restructuring
and related charges within gross profit and operating expenses during
fiscal 2004, 2003, 2002, and 2001 reflecting: (i) the rationalization
of uneconomic manufacturing, packaging, and distribution processes,
(ii) the realignment of manufacturing capacities, and (iii)
restructuring of the Company’s administrative functions. In
fiscal 2003, the Company recorded retailer markdown costs of $6.2
million as a reduction to net sales, as part of the introduction of the
Company’s new alkaline product line packaging. See Note 15 in
the Notes to Consolidated Financial Statements and the
Management’s Discussion and Analysis for more information. |
| (3) |
In fiscal 2002, the Company
recognized a bad debt reserve of $12.0 million, net of recoveries,
attributable to the bankruptcy filing of a key customer. |
| (4) |
The Company recorded non-operating
expenses in fiscal 2003 and fiscal 2001 relating to the premium on the
repurchase of or redemption of the Company’s senior term notes
and write-off of debt issuance costs. See Note 6 in the Notes to
Consolidated Financial Statements and the Management’s
Discussion and Analysis for more information. |
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