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Rayovac Q4 N.A. Sales Drop 3%, Profit Rises

11/07/2002 10:31:00 AM Eastern

Madison, Wis. - Rayovac saw its fiscal fourth quarter North American sales dip 3 percent, to $122.6 million, from $126.6 million year-on-year, said total general battery sales declined 7 percent in North America.

This decline reflected lower alkaline battery sales, mainly due to lower sales at Kmart; a cautious retail environment and intense promotional activity; and a 10 percent decrease in rechargeable battery sales, reflecting lower sales to Kmart and the timing of promotional programs.

However, profitability in the North American segment soared to $33 million in the fourth quarter, ended Sept. 30, up from $21.4 million in the year-ago period. The increase was attributed to improved gross profit margin and favorable expenses reflecting strict cost controls, lower advertising and lower bad debt charges for customer bankruptcies in the current quarter.

For the 12 months, Rayovac North American segment sales dropped to $435.5 million, compared with $448.8 million in the prior year. Profit in the segment, however, moved up for the year, hitting $85.5 million, compared with $80.8 million year over year. The 12 months, ended Sept. 30, 2002, reflect a bad debt recovery of $4.1 million and a bad debt reserve, net of the recovery, of $12 million attributable to the Kmart bankruptcy.

Consolidated Rayovac sales slid 9.3 percent in the fourth quarter, down to $154.3 million, from $170.2 million in the same three months in 2001. Operating income before special charges climbed 31 percent in the fourth quarter, to $24.1 million, compared with $18.4 million in the year-ago fourth quarter. Net income hit $13.1 million for the period, up from $6.5 million year-on-year.

For the 12 months, consolidated Rayovac sales dropped 7.1 percent, hitting $572.7 million, down from $616.2 million in the previous year. Operating income before special charges took a 16.3 percent hit in the 12 months, down to $64.2 million, from $76.7 million in the previous year. Net income came in at $29.2 million for the 12 months, up from $11.5 million year over year.

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