Restructuring and Related Charges

12 Months Ended

Sep. 30, 2011

Restructuring and Related Charges [Abstract]

(23) Restructuring and Related Charges

The Company reports restructuring and related charges associated with manufacturing and related initiatives of Spectrum Brands in “Cost of goods sold.” Restructuring and related charges reflected in “Cost of goods sold” include, but are not limited to, termination and related costs associated with manufacturing employees, asset impairments relating to manufacturing initiatives, and other costs directly related to the restructuring or integration initiatives implemented.

The Company reports restructuring and related charges relating to administrative functions of Spectrum Brands in “Selling, general and administrative expenses,” which include, but are not limited to, initiatives impacting sales, marketing, distribution, or other non-manufacturing related functions. Restructuring and related charges reflected in “Selling, general and administrative expenses” include, but are not limited to, termination and related costs, any asset impairments relating to the functional areas described above, and other costs directly related to the initiatives implemented as well as consultation, legal and accounting fees related to the evaluation of the Predecessor’s capital structure incurred prior to the Bankruptcy Filing.

In 2009, Spectrum Brands implemented a series of initiatives to reduce operating costs as well as evaluate Spectrum Brands’ opportunities to improve its capital structure (the “Global Cost Reduction Initiatives”). These initiatives included headcount reductions and the exit of certain facilities in the U.S. These initiatives also included consultation, legal and accounting fees related to the evaluation of Spectrum Brands’ capital structure. In 2008, Spectrum Brands implemented an initiative within certain of its operations in China to reduce operating costs and rationalize Spectrum Brands’ manufacturing structure. These initiatives included the plan to exit Spectrum Brands’ Ningbo, China battery manufacturing facility (the “Ningbo Exit Plan”). In 2007, Spectrum Brands implemented an initiative in Latin America to reduce operating costs (the “Latin American Initiatives”). These initiatives included the reduction of certain manufacturing operations in Brazil and the restructuring of management, sales, marketing, and support functions. In 2007, Spectrum Brands began managing its business in three vertically integrated, product-focused lines of business (the “Global Realignment Initiatives”). In connection with these changes, Spectrum Brands undertook a number of cost reduction initiatives, primarily headcount reduction. In 2006, Spectrum Brands implemented a series of initiatives within certain of its European operations to reduce operating costs and rationalize Spectrum Brands’ manufacturing structure (the “European Initiatives”). In connection with the acquisitions of United Industries Corporation and Tetra Holding GmbH in 2005, Spectrum Brands implemented a series of initiatives to optimize the global resources of the combined companies (the “United and Tetra Integration”).

The following table summarizes restructuring and related charges incurred by initiative:

Restructuring and Related Charges


	Successor									Predecessor
							Period from			Period from
							August 31,			October 1,
							2009 through			2009 through		Charges		Expected		Total		Expected
							September 30,			August 30,		Since		Future		Projected		Completion
Initiatives:	2011			2010			2009			2009		Inception		Charges		Costs		Date
Global Cost Reduction	$	25,484		$	18,443		$	1,550		$	18,851	$	64,328	$	13,587	$	77,915	January 31, 2015
Ningbo Exit Plan		273			2,162			165			10,652		29,651		—		29,651	Complete
Latin America		—			—			—			207		11,447		—		11,447	Complete
Global Realignment		3,138			3,605			139			11,636		91,725		702		92,427	June 30, 2013
European		(251	)		(92	)		7			11		26,714		—		26,714	Substantially Complete
United & Tetra / Other		—			—			(132	)		2,723		79,544		—		79,544	Complete

	$	28,644		$	24,118		$	1,729		$	44,080	$	303,409	$	14,289	$	317,698

The following table summarizes restructuring and related charges incurred by type of charge and where those charges are classified in the accompanying Consolidated Statements of Operations:


	Successor									Predecessor
							Period from			Period from
							August 31,			October 1, 2008
							2009 through			through
							September 30,			August 30,
	2011			2010			2009			2009
Costs included in cost of goods sold:
Global Cost Reduction Initiatives:
Termination benefits	$	1,679		$	2,630		$	—		$	200
Other associated costs		5,889			2,273			6			2,245
Ningbo Exit Plan:
Termination benefits		—			14			—			857
Other associated costs		273			2,148			165			8,461
Latin America initiatives:
Termination benefits		—			—			—			207
Global Realignment Initiatives:
Termination benefits		—			187			—			333
Other associated costs		—			(102	)		—			869
European Initiatives:
Other associated costs		—			—			7			11
United & Tetra Integration:
Termination benefits		—			—			—			6

Total included in cost of goods sold		7,841			7,150			178			13,189

Costs included in selling, general and administrative expenses:
Global Cost Reduction Initiatives:
Termination benefits		10,155			4,268			866			5,690
Other associated costs		7,761			9,272			678			10,716
Ningbo Exit Plan:
Other associated costs		—			—			—			1,334
Global Realignment Initiatives:
Termination benefits		1,207			5,361			94			6,994
Other associated costs		1,931			(1,841	)		45			3,440
European Initiatives:
Termination benefits		(251	)		(92	)		—			—
United & Tetra Integration:
Termination benefits		—			—			—			2,297
Other associated costs		—			—			(132	)		427
Breitenbach, France facility closure		—			—			—			(7	)

Total included in selling, general and administrative expenses		20,803			16,968			1,551			30,891

Total restructuring and related charges	$	28,644		$	24,118		$	1,729		$	44,080

The following table summarizes the remaining accrual balance associated with the initiatives and the activity during Fiscal 2011:

Remaining Accrual Balance


	Accrual											Accrual
	Balance at											Balance at
	September 30,					Cash			Non-Cash			September 30,		Expensed as
Initiatives	2010		Provisions			Expenditures			Items			2011		Incurred(a)

Global Cost Reduction
Termination benefits	$	6,447	$	10,423		$	(8,286	)	$	211		$	8,795	$	1,411
Other costs		4,005		1,319			(2,890	)		587			3,021		12,331

		10,452		11,742			(11,176	)		798			11,816		13,742

Ningbo Exit Plan
Other costs		491		24			(143	)		(372	)		—		249

		491		24			(143	)		(372	)		—		249

Global Realignment Termination benefits		8,721		1,207			(7,394	)		(5	)		2,529		—
Other costs		2,281		71			(832	)		322			1,842		1,860

		11,002		1,278			(8,226	)		317			4,371		1,860

European
Termination benefits		1,801		(251	)		(638	)		(912	)		—		—
Other costs		47		—			(47	)		—			—		—

		1,848		(251	)		(685	)		(912	)		—		—

	$	23,793	$	12,793		$	(20,230	)	$	(169	)	$	16,187	$	15,851


(a)		Consists of amounts not impacting the accrual for restructuring and related charges.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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