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 third 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 nine months. Segment profit was $52.5 million, including special items, in the nine months, down from $59.4 million year over year.
Overall Rayovac sales for the nine months hit $418.4 million, down 6.2 percent from the $446 million recorded in the same period last year. Alkaline battery sales rose 1 percent in the nine months, while rechargeable battery sales increased 13 percent during this timeframe.
Operating income, before special charges, declined to $40.1 million in the nine months, compared with $58.3 million the previous year. Net income dipped to $16.1 million in the nine months, compared with $5.1 million in the same period last year. Including an extraordinary item, net income in last year’s nine months was $10.5 million.