Rayovac N.A. Segment Sales Drop 12% - Twice

Rayovac N.A. Segment Sales Drop 12%

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Madison, Wis. - North American segment sales at battery maker Rayovac slipped about 12 percent in the company's fiscal fourth quarter, down to $108.7 million, from $122.6 million in the year-ago period.

The sales decline, said Rayovac, is reflected, in part, from anticipated impact of retailer transition to the company's new '50 percent more' alkaline program, as it completes SKU conversions in preparation for the key October through December selling period.

Despite a decline in alkaline sales, rechargeable batteries and recharger sales jumped 20 percent in the fourth quarter, said Rayovac.

North American segment profitability decreased to $19.8 million in the fourth quarter, down from $33 million in the same period in 2002. This was due to the revenue shortfall, plus gross profit margin reduction due to product and customer mix changes and the impact of retailer inventory re-pricing programs.

For the 12 months, North American sales dropped 14 percent, down to $376 million, from $435.5 million the previous year. This slide was primarily driven by a decline in alkaline sales due to lower volume resulting from the intense competitive environment and to pricing adjustments made during the year.

North American segment profitability for the 12 months was $64.8 million, a decrease from the $85.5 million registered a year earlier. The profitability decline was due mainly to the sales decline and changes in sales mix. Last year's results include a Kmart bad debt expense of $12 million.

Consolidated Rayovac sales in the fourth quarter, ended Sept. 30, climbed 63.3 percent, to $252 million, up from $154.3 million year on year. Most of the sales increase was attributable to Rayovac's acquiring the consumer battery business of European maker Varta. For the 12 months, sales climbed 61 percent, reaching $922.1 million, up from $572.7 million the previous year.

Consolidated operating income rose 11 percent in the fourth quarter, hitting $28.3 million, compared with $25.5 million in the year-ago period. Pro forma operating income for the three months was $33.1 million, up from $24.1 million. For the 12 months, operating income slipped 5.4 percent, down to $59.6 million, from $63 million year on year. Pro forma 12-month operating income was $98.4 million, compared with $76.2 million year over year.

Consolidated net income for the fourth quarter came in at $12.9 million, down from $13.1 million in the same three months last year. For the 12 months, net income was about cut in half, down to $15.5 million, from $29.2 million the previous year.

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