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Spectrum Reports N.A. Rayovac Battery Sales Decline

7/28/2005 12:56:00 PM Eastern

Atlanta — “Modest” was the declaration given to fiscal third-quarter global battery growth at Spectrum Brands, which markets the Rayovac battery brand, while bottom line battery earnings results were tempered by increases in raw materials and higher fuel and transportation costs.

Sales in Spectrum’s North American segment reached $149 million in the third quarter, up from $136.3 million in the same three months a year earlier. Strong sales in the company’s Remington-brand products were partially offset by a modest decline in battery sales. North American segment profit dropped to $31.4 million in the three months, ended July 3, from a year-on-year $32 million.

Fiscal 2005 battery sales, gross profit and margin were negatively impacted by the transition from Rayovac’s “50% More” battery marketing campaign to a new, performance-based marketing strategy, said Spectrum. Increased raw materials and fuel and transportation costs impacted margins as well, said Spectrum.

For the nine months, North American sales reached $477.4 million, compared with $484.5 million the previous year, due to weakness in the shaving and grooming category. Restructuring, integration and cost improvement initiatives, partially offset by lower sales and increased costs, resulted in a segment profitability increase, to $94.9 million, from $85.6 million in the first nine months last year.

Consolidated Spectrum third quarter sales jumped 36.9 percent, hitting $730.4 million, up from $308.3 million in the same three months the previous year. The figures include full-quarter results for United Industries, acquired last February. Net income about doubled to $23.7 million, compared with $12.8 million year-on-year.

For the nine months, consolidated net sales increased to $1.8 billion, from $1 billion the previous year, due to inclusion of results from recently purchased companies. Net income for the nine month period rose to $49.7 million, from $37.6 million a year ago.

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