UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2004 and the unaudited pro forma condensed consolidated statement of operations for the fiscal year ended September 30, 2004 are based on the consolidated financial statements of Rayovac and United after giving effect to Rayovac’s acquisition of Microlite, United’s acquisitions of Nu-Gro and United Pet Group and consummation of the respective transactions, including the acquisition of United, and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial data.

The unaudited pro forma condensed consolidated balance sheet as of September 30, 2004 has been derived from Rayovac’s condensed consolidated balance sheet as of September 30, 2004 and United’s unaudited consolidated balance sheet as of September 30, 2004, adjusted to give effect to the transactions as if they had occurred on September 30, 2004. The unaudited pro forma condensed consolidated statement of operations for the fiscal year ended September 30, 2004 gives effect to the transactions as if they occurred at the beginning of the period presented. The unaudited pro forma condensed consolidated statement of operations for the fiscal year ended September 30, 2004 gives effect to United’s acquisition of Nu-Gro, which occurred on April 30, 2004, Rayovac’s acquisition of Microlite, which occurred on May 28, 2004, and United’s acquisition United Pet Group, which occurred on July 30, 2004, as if each acquisition occurred at the beginning of the period presented. The unaudited pro forma condensed consolidated statement of operations excludes non-recurring items directly attributable to the transactions.

The unaudited pro forma condensed consolidated financial data are based on preliminary estimates and assumptions set forth in the notes to such information. Pro forma adjustments are necessary to reflect the estimated purchase price for the respective transactions, the new debt and equity structure and to adjust amounts related to United’s assets and liabilities to a preliminary estimate of their fair values. Pro forma adjustments are also necessary to reflect interest expense and the income tax effect related to the pro forma adjustments.

The pro forma adjustments and allocation of purchase price are preliminary and are based on management’s estimates of the fair value of the assets acquired and liabilities assumed. The final purchase price allocation will be completed after asset and liability valuations are finalized. This final valuation will be based on the actual assets and liabilities of United that exist as of the date of the completion of the transactions. Any final adjustments may change the allocation of purchase price which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma condensed consolidated financial data. In addition, the impact of integration activities, the timing of the completion of the transactions and other changes in United’s assets and liabilities prior to completion of the transactions could cause material differences in the information presented.

The unaudited pro forma condensed consolidated financial data are presented for informational purposes only and have been derived from, and should be read in conjunction with, “Selected Financial Data — Rayovac”, “Selected Financial Data — United” and the consolidated financial statements of Rayovac and United, including the notes thereto. The pro forma adjustments, as described in the notes to the unaudited pro forma condensed consolidated financial data, are based on currently available information and certain adjustments that Rayovac believes are reasonable. They are not necessarily indicative of Rayovac’s consolidated financial position or results of operations that would have occurred had the transactions taken place on the dates indicated, nor are they necessarily indicative of future consolidated financial position or results of operations.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of September 30, 2004

(in thousands)

	Rayovac Corporation (1)		United Industries (2)		Pro Forma Adjustments (3)			Rayovac & United Pro Forma Combined

ASSETS
Current assets:
Cash and cash equivalents	$	15,789	$	8,290	$	35	(a)	$	24,114
Receivables, net	289,632		107,493		—			397,125
Inventories	264,726		160,003		15,000		(b)	439,729
Deferred income taxes	19,233		—		6,731		(c)	25,964
Other current assets	61,132		19,885		—			81,017

Total current assets	650,512		295,671		21,766			967,949
Property, plant and equipment, net	182,396		99,365		—			281,761
Goodwill	320,577		247,446		458,903		(d)	1,026,926
Intangible assets, net	422,106		310,898		—			733,004
Deferred income taxes	—		78,495		—			78,495
Other assets	60,378		22,839		(7,714		)(e)	75,503

Total assets	$	1,635,969	$	1,054,714	$	472,955		$	3,163,638

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	23,895	$	6,678	$	(764	)(f)	$	29,809
Accounts payable	228,052		41,653		—			269,705
Accrued liabilities	146,711		67,195		(4,665		)(f)	209,241

Total current liabilities	398,658		115,526		(5,429		)	508,755
Long term debt, net of current maturities	806,002		865,667		135,464		(f)	1,807,133
Deferred income taxes	7,272		—		—			7,272
Other non-current liabilities	106,614		5,290		—			111,904

Total liabilities	1,318,546		986,483		130,035			2,435,064

Minority interest in equity of consolidated subsidiary	1,379		—		—			1,379

Total shareholders’ equity	316,044		68,231		342,920		(g)	727,195

Total liabilities and shareholders’ equity	$	1,635,969	$	1,054,714	$	472,955		$	3,163,638

Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet

(1) Condensed consolidated balance sheet for Rayovac, as obtained from Rayovac’s Annual Report on Form 10-K for the period ended September 30, 2004.

(2) Condensed consolidated balance sheet for United, as obtained from United’s Quarterly Report on Form 10-Q for the period ended September 30, 2004.

(3) The total estimated consideration as shown in the table below is allocated to the assets and liabilities of United as if the transactions had occurred on September 30, 2004. The allocation set forth below is preliminary. The unaudited pro forma condensed combined financial information assumes that the historical values of United’s current assets, current liabilities and property plant and equipment approximate fair value, except as adjusted, pending forthcoming appraisals and other financial information.

The allocation of consideration to acquired intangible assets is subject to the outcome of independent appraisals to be conducted after the completion of the combination transactions. A pro forma allocation of the consideration to the identifiable intangible assets of United has not been performed below; instead, all residual consideration has been allocated to goodwill. The actual amounts recorded when the combination transactions are completed may differ materially from the pro forma amounts presented below (in thousands).

Total purchase price:

Issuance of Rayovac common stock	$	439,175
Cash consideration	70,000
Assumption of United debt	872,345
Acquisition related costs	35,000
	$	1,416,520

Preliminary allocation of purchase price, reflecting the transactions:

Estimated adjustments to reflect assets and liabilities at fair value:
Historical value of assets acquired, excluding goodwill, as of September 30, 2004	$	807,268
Historical value of liabilities assumed	(986,483		)
Write-off of United deferred financing fees	(19,772		)
Current deferred tax liability recognized in association with the write-off of United deferred financing fees	7,513
Inventory valuation	15,000
Current deferred tax asset recognized on inventory valuation	(5,700		)
Assumption of United debt	872,345
Direct acquisition costs	20,000
Goodwill acquired (including $247,446 of pre-acquisition goodwill)	706,349
	$	1,416,520

(a) Net change in cash after completion of the transactions.

(b) Adjustment to the estimated purchase accounting valuation related to inventory.

(c) Tax benefits associated with the anticipated write-off of Rayovac and United unamortized debt issuance costs and purchase accounting adjustments to inventory.

(d) Estimated preliminary fair market value of incremental goodwill associated with the transactions.

(e) Write-off of United unamortized debt issuance costs of $19,772 and Rayovac unamortized debt issuance costs of $12,942 related to debt to be refinanced less the estimated $25,000 of deferred financing costs to be incurred in connection with the transactions.

(f) Net additional debt incurred after repayment of United debt, $868,822, and accrued interest, $4,665, at September 30 2004.

(g) Reflects the following adjustments affecting equity:

Issuance of common stock (13,750 shares @ $31.94)	$	439,175
Direct acquisition costs	(20,000		)
Historical value of United net assets acquired	(68,231		)
Rayovac debt financing cost write-off, net of tax	(8,024		)
	$	342,920

Note: The stock price of $31.94 used in the calculation of the purchase price is based on a five day closing price average beginning two days prior to Rayovac’s announcement of the acquisition of United.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Year Ended September 30, 2004

(in thousands)

	Rayovac Corporation (1)			Microlite (2)			ProForma Adjustments			Rayovac Combined			United Industries (6)			United Pet Group (7)		Nu-Gro (8)			ProForma Adjustments					United Industries Combined				ProForma Adjustments					Rayovac & United ProForma Combined

Net sales	$	1,417,186		$	37,618		$	—		$	1,454,804		$	640,890		$	206,834		$	87,942		$	—				$	935,666			$	—				$	2,390,470
Cost of goods sold	811,894			28,294			—			840,188			423,712			136,554		67,976			7,884			(9)		636,126				(55,528			)(13)		1,420,786
Restructuring and related charges	(781		)	—			—			(781		)	—			—		—			—					—				—					(781			)

Gross profit	606,073			9,324			—			615,397			217,178			70,280		19,966			(7,884			)		299,540				55,528					970,465
Operating expenses:
Selling, general and administrative expenses	437,629			15,695			3,241		(3)	456,565			165,695			55,312		11,760			1,148			(10)		233,915				55,528			(13)		746,008
Restructuring and related charges	12,224			—			—			12,224			—			—		—			—					—				—					12,224
	449,853			15,695			3,241			468,789			165,695			55,312		11,760			1,148					233,915				55,528					758,232
Operating income (loss)	156,220			(6,371		)	(3,241		)	146,608			51,483			14,968		8,206			(9,032			)		65,625				—					212,233
Interest expense	65,702			4,366			(2,252		)(4)	67,816			42,528			7,308		591			1,228			(11)		51,655				2,321			(14)		121,792
Other expense (income), net	64			(50		)	—			14			—			—		—			—					—				(890			)(15)		(876			)
Minority interest	(78		)	—			—			(78		)	—			—		—			—					—				—					(78			)

Income (loss) from continuing operations before income taxes	90,532			(10,687		)	(989		)	78,856			8,955			7,660		7,615			(10,260			)		13,970				(1,431			)		91,395
Income tax expense (benefit)	34,372			—			—		(5)	34,372			(96,231		)	5,856		2,793			(3,899			)(12)		(91,481			)	(544			)(16)		(57,653			)(17)

Income from continuing operations	56,160			(10,687		)	(989		)	44,484			105,186			1,804		4,822			(6,361			)		105,451				(887			)		149,048
Loss from discontinued operations, net of tax	380			—			—			380			—			—		—			—					—				—					380

Net income (loss)	$	55,780		$	(10,687	)	$	(989	)	$	44,104		$	105,186		$	1,804		$	4,822		$	(6,361		)		$	105,451			$	(887		)		$	148,668

Notes to Unaudited Pro Forma Consolidated Statement of Operations

(1) Consolidated statement of operations for Rayovac, as obtained from Rayovac’s Annual Report on Form 10-K for the period ended September 30, 2004.

(2) Represents the historical operating results for Microlite for the period from October 1, 2003 to May 28, 2004.

(3) Reclassification of Microlite expenses from interest expense to selling, general and administrative expenses to conform to the Rayovac presentation.

(4) Reclassification of Microlite expenses to conform to Rayovac’s presentation, net of additional interest expense incurred in connection with the acquisition of Microlite.

(5) No net income tax benefit has been recognized in connection with Microlite’s operating loss for the period from October 1, 2003 to May 28, 2004. Based on historical levels of income and the length of time required to utilize its deferred tax assets, the Company determined that it was more likely than not that it would not fully utilize its Microlite deferred tax assets and therefore recorded a valuation allowance against the benefit of such losses.

(6) Represents the historical operating results for United Industries for the twelve-month period ended September 30, 2004, including the results of United Pet Group from July 30, 2004, its date of acquisition, through September 30, 2004, and Nu-Gro from April 30, 2004, its date of acquisition, through September 30, 2004.

(7) Represents the historical operating results for United Pet Group for the period from October 1, 2003 to July 30, 2004.

(8) Represents the historical operating results for Nu-Gro for the period from October 1, 2003 to April 30, 2004.

(9) Represents a reclassification of $7.7 million from selling, general and administrative expenses related to freight costs to conform with the accounting treatment for such costs by United Industries. The adjustment also includes an adjustment to record incremental depreciation expense related to property and equipment acquired in the United Pet Group acquisition based on estimated fair values. Such property and equipment is being depreciated using the straight-line method over varying periods, the average of which is approximately 10 years.

(10) Represents an adjustment to record approximately $8.8 million of incremental amortization expense related to intangible assets (other than goodwill) acquired in the United Pet Group and Nu-Gro acquisitions, based on estimated fair values. Intangible assets acquired included trade names, patents and customer relationships. The majority of acquired trade names are being amortized using the straight-line method over periods ranging from 5 to 40 years, while several trade names have been determined to have indefinite lives. Patents acquired and customer relationships are being amortized using the straight-line method over 15 years and 5 years, respectively. This adjustment is offset by the reclassification of $7.7 million of freight costs from selling, general and administrative expenses to cost of goods sold to conform with the accounting treatment for such costs by United Industries.

(11) Represents the change in interest expense related to the new senior credit facility executed by United Industries on April 30, 2004, a portion of the proceeds of which were used to finance the Nu-Gro acquisition, and the amendment of such senior credit facility on July 30, 2004, a portion of the proceeds of which were used to finance the United Pet Group acquisition.

(12) Represents the income tax benefit associated with the adjustments described herein to arrive at an estimated pro forma 2004 statutory tax rate of 38%.

(13) Represents a reclassification of freight costs from cost of goods sold to selling, general and administrative expenses to conform with the accounting treatment for such costs by Rayovac.

(14) Represents increased interest expense, net of a reclassification of interest income, associated with the debt issued and refinanced in connection with the transactions. The effect of a 0.125 percent change in the expected interest rate on the approximately $1 billion of variable rate debt to be refinanced in connection with the transactions is approximately $1.3 million.

(15) Represents a reclassification of interest income from interest expense, net, to conform to Rayovac’s presentation.

(16) Represents the income tax benefit associated with the adjustments described herein to arrive at an estimated pro forma 2004 statutory tax rate of 38%.

(17) Includes a reduction of income tax expense of $104.1 million, reflecting a full reversal of United’s valuation allowance originally established against the tax deductible goodwill deduction and certain net operating loss carryforwards that were generated in 1999 through 2003. Based on historical levels of income and the length of time required to utilize its deferred tax assets, the Company determined that it was more likely than not that it would fully utilize its deferred tax assets and that it was no longer necessary to maintain a valuation allowance. The following table excludes this one-time adjustment from income tax expense in arriving at net income:

UNITED INDUSTRIES CORP 8-K