Rayovac Fiscal 3rd Qtr. General Battery Sales Off 10 Percent

Madison, Wis.— A cautious retail environment; lower alkaline battery volume, mainly due to lower sales to Kmart; and lower heavy-duty battery movement — all combined to reduce general battery sales at Rayovac by 10 percent in the company's fiscal third quarter.

Rechargeable battery sales continued strong growth at Rayovac, climbing 32 percent in the three months over the same period a year ago. This upward swing was fueled by the success of the company's one-hour charging system, Rayovac said.

Total Rayovac North American sales dropped 5 percent in the third quarter, down to $100.9 million, from $106.4 million in the year-ago period.

North American profitability, excluding the Kmart recovery, improved 7 percent in the third quarter, mainly due to improved gross profit margin and favorable expenses reflecting strict cost controls. Segment profit was $27.4 million in the third quarter, reflecting a bad debt recovery of $4.1 million and a bad debt reserve, net of recovery, of $12 million — both attributable to the Kmart bankruptcy. This compares with $21.8 million in the third quarter of 2001. Overall Rayovac third quarter sales decreased 7.9 percent, to $135.4 million, down from $147 million in the same three months last year. Operating income for the quarter, before special charges, climbed 8 percent, to $23.7 million, up from $21.6 million the prior year. Net income increased to $10.3 million in the third quarter, compared with $2.7 million in the same three months last year. Including an extraordinary item, net income in last year's third quarter was $8.1 million.

For the nine months, North American segment sales dropped to $312.9 million, down from $322.2 million in the year-ago period. Segment profit was $52.5 million, including special items, in the nine months, down from $59.4 million year over year.