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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission File Number: 333-76055

UNITED INDUSTRIES CORPORATION
(Exact name of registrant as specified in its charter)

2150 Schuetz Road

                            St. Louis, Missouri 63146                            

(Address of principal executive office, including zip code)

   (314) 427-0780   

(Registrant's telephone number, including area code)

                      43-1025604                       

(I.R.S. Employer Identification No.)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Not Applicable.

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o    No ý

        The aggregate market value of common stock held by non-affiliates is not determinable because there is no established public market for the registrant's common stock.

        As of February 27, 2004, the registrant had 30,130,731 Class A voting and 30,130,731 Class B nonvoting shares of common stock outstanding and 37,600 nonvoting shares of Class A preferred stock outstanding.

        Documents incorporated by reference: None.

UNITED INDUSTRIES CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2003

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This Annual Report contains forward-looking statements. These statements are subject to a number of risks and uncertainties, many of which are beyond our control. All statements other than statements of historical facts included in this Annual Report, including statements regarding our strategy, future operations, financial position, estimated revenues, projected costs, projections, plans and objectives of management, are forward-looking statements. As may be used in this Annual Report, the words "will," "should," "believe," "plan," "may," "strategies," "goals," "anticipate," "indicate," "intend," "determine," "estimate," "expect," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements apply only as of the date they are disclosed and are based on our expectations at that time. We do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that our plans, intentions and expectations reflected in or suggested by any forward-looking statements we make in this Annual Report are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved.

        Our actual results could differ significantly from the results discussed in any forward-looking statements contained in this Annual Report. Factors that could cause or contribute to such differences include, without limitation, those discussed in Exhibit 99.1 to this Annual Report and elsewhere in this Annual Report.

TRADEMARKS

        Spectracide®, Spectracide Triazicide®, Spectracide Terminate®, Spectracide Pro®, Hot Shot®, Garden Safe®, Schultz™, Rid-a-Bug®, Bag-a-Bug®, Real-Kill®, No-Pest®, Repel®, Vigoro®, Sta-Green® and Bandini® are among our trademarks and trade names. We also license certain Cutter® trademarks from Bayer A.G. and certain Peters® and Peters Professional® trademarks from The Scotts Company. Other trademarks and trade names used in this Annual Report are the property of their respective owners.

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PART I

ITEM 1. BUSINESS.

        Except as otherwise required by the context, references in this Annual Report to "United Industries," the "Company," "we," "us" and "our" each refers to United Industries Corporation and its consolidated subsidiaries.

        Operating as Spectrum Brands, we are majority owned by UIC Holdings, L.L.C. and are the leading manufacturer and marketer of value-oriented products for the consumer lawn and garden care and insect control markets in the United States. Under a variety of brand names, we manufacture and market one of the broadest lines of products in the industry, including herbicides and indoor and outdoor insecticides, as well as insect repellents, fertilizers, growing media and soils. Our value brands are targeted toward consumers who want products and packaging that are comparable or superior to, and at lower prices than, premium-priced brands, while our opening price point brands are designed for cost conscious consumers who want quality products. Our products are marketed to mass merchandisers, home improvement centers, hardware, grocery and drug chains, nurseries and garden centers. Our three largest customers are The Home Depot, Lowe's and Wal*Mart, which are leading and fast growing retailers in our larger segments. We had net sales of $536.2 million and operating income of $68.9 million during the year ended December 31, 2003 and net sales of $480.0 million and operating income of $61.2 million during the year ended December 31, 2002.

        We compete in the $2.8 billion consumer lawn and garden and $0.9 billion insect control retail markets and are benefiting from a shifting of consumer preferences toward value-oriented products. We believe a key growth factor in the lawn and garden retail market is the aging of the United States population, as consumers over the age of forty-five represent the largest segment of lawn and garden care product users and typically have more leisure time and higher levels of discretionary income than the general population. We also believe the growth in the home improvement center and mass merchandiser channels has increased the popularity of do-it-yourself activities, including lawn and garden projects. We believe key growth factors in the insect control retail market include general economic growth and increasing awareness of insect-spread illnesses such as the West Nile Virus.

Competitive Strengths

        Our success is based on the following competitive strengths:

        Strong Relationships With Leading and Fast Growing Retailers.    Through our ability to "add value" for our retail customers, we have developed strong relationships with a number of leading national home centers and mass merchandisers. Three such retailers are our three largest customers—The Home Depot, Lowe's and Wal*Mart. These retailers each hold significant positions in the lawn and garden and household categories in which we compete and have together opened over 1,200 new stores in the last three years. As a result, we have been able to significantly increase our sales and capture greater market share.

        "One-Stop" Supplier.    We offer a broad product line of the value-oriented products that consumers demand as an alternative to premium-priced products. This product breadth, enhanced by our ability to create innovative products and to acquire and integrate products and businesses, improves our ability to be a "one-stop" supplier of branded, value-oriented products in both the lawn and garden and insect control categories for our customers.

        Broad Technology Portfolio.    We have close relationships with key global active ingredient suppliers and have access to a broad portfolio of chemistry due to our significant presence in the pesticide market. This broad-based access to technology enables us to develop products that differentiate between our various opening-price point offerings and our nationally distributed value brands while

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offering product efficacy that is competitive with premium-priced products. In 2003, as in previous years, we executed several key supply agreements that provide us access to premier, proprietary active ingredients and strengthen our technology leadership position in our industry.

        Strong Management Team.    Our senior management team has extensive industry experience and has grown our business by developing and introducing new products, expanding our distribution channels and acquiring new brands and products, while improving our operating efficiencies.

Business Strategy

        We plan to build upon our strengths and favorable industry trends to enhance our competitive position by implementing the following key elements of our business strategy:

        Enhance Relationships With Leading Retailers.    We seek to leverage our strong value brand position and operational expertise to continue to deliver greater value to leading retailers than our competitors. We focus on enhancing retailers' profitability in selling our products by being a low-cost provider and leveraging our one-step distribution process. We are able to compete as a low-cost provider due to our efficient marketing programs, high level of vertical integration and significant distribution leverage. We currently manufacture and market opening price point brands for leading retailers such as Ace Hardware, Albertsons, Dollar General, The Home Depot, Lowe's, Target, Tru*Serv, Walgreens and Wal*Mart. We also believe our relationship as a supplier of "house brands" provides a basis for broadening our product offerings. While we have not historically maintained long-term supply contracts with our key customers, we continue to develop new strategies to reduce the variability of our product listings and further enhance our position with them.

        Leverage Our Operating Model.    We continually strive to strengthen our distribution network and relationships with retailers. We have increased our sales and improved operating leverage by supplying complementary product lines to retailers. Our strategy is to continue to expand our product portfolio either through new product development or by acquiring product lines or businesses, as follows:

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Organic Growth: Our new product development strategy is to introduce innovative products that have superior performance, easy-to-understand and visually appealing packaging, value pricing and that are technologically differentiated. For example, the introduction of our Spectracide Triazicide products propelled the Spectracide brand to a leading position in the home center channel in 2002 and 2003. Since 1999, we have developed over 300 new products.



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Acquisitions: Our acquisition strategy is to selectively acquire product lines or businesses that can benefit from our position as a "house" supplier, strong distribution network, product development expertise, access to a broad technology portfolio and other competitive strengths. For example, the products we acquired in our merger with Schultz Company and acquisition of WPC Brands, Inc. have benefited from our distribution leverage and certain of the acquired fertilizer brands enhanced our existing relationships with key customers.

        Maintain and Enhance Technological Strength.    We plan to continue our focus of building and maintaining a broad technology portfolio to enhance product differentiation and to maintain product efficacy. By increasing scale, we seek to leverage our relationships with global active ingredient suppliers to maintain and expand our technologically advanced product offerings, with a focus on exclusive chemistry and new technology.

        Coordinate Sales and Customer Service Efforts.    We have four customer-focused platform teams that are comprised of dedicated executive, sales, marketing, supply chain and finance personnel. Three of these teams are located in the cities of our largest customers' headquarters while the fourth is based at our corporate headquarters to serve our other accounts. In addition, we continue to refine our in-store retail service force to improve service to key customers. Our recent realignment of this force in 2003,

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combined with our customer-focused platform teams, allow us to provide separate, dedicated, individually tailored customer service to our key customers and respond more quickly and proactively to their specific needs.

        Increase Supply Chain Efficiency.    We plan to leverage our greater purchasing power for raw materials and active ingredients resulting from our organic growth and acquisitions to seek improved prices and terms from suppliers. In addition, we intend to selectively in-source or out-source products, based on the cost, quality and reliability of available alternatives. Toward that end, we have improved costs and reliability by acquiring one fertilizer manufacturing plant and leasing another plant in 2002, which allows us to manufacture much of our granular fertilizer product internally instead of relying on outsourcing arrangements.

Industry Overview

        Retail sales of consumer lawn and garden products in the United States totaled approximately $2.8 billion during the year ended December 31, 2003. We believe that the industry will continue to grow over the next several years due to favorable demographic trends. According to a national, independent gardening survey conducted in 2001, approximately 85 million households in the United States, or 80% of all households in the United States, participate in some form of lawn and garden care activity. We believe a key growth factor in the lawn and garden retail market is the aging of the United States population, as consumers over the age of forty-five represent the largest segment of lawn and garden care product users and typically have more leisure time and higher levels of discretionary income than the general population. We also believe the growth in the home improvement center and mass merchandiser channels have increased the popularity of do-it-yourself activities, including lawn and garden projects.

        Retail sales of household insecticide and repellent products in the United States totaled approximately $0.9 billion during the year ended December 31, 2003. We believe that the industry will continue to grow over the next several years due to general economic growth and increasing awareness of insect-spread illnesses such as the West Nile Virus.

Our History

        We were founded in 1969 and incorporated as a Delaware corporation in 1973. On January 20, 1999, UIC Holdings, L.L.C., which is owned by Thomas H. Lee Equity Fund IV, L.P., its affiliates and some members of our management at that time, acquired substantially all of our capital stock in a recapitalization transaction. UIC Holdings, L.L.C. is the beneficial owner of approximately 92% of our common stock on a fully diluted basis as of February 27, 2004.

        Acquisition of Brands.    In 1973, we acquired the assets of Spray Chem, a contract manufacturer of liquid and aerosol insecticides and herbicides. In 1985, we acquired the Real-Kill brand and entered into the manufacture and distribution of branded products. In 1988, we formed our core businesses through the acquisition of certain assets of various businesses of Chesebrough-Ponds. The acquired brands included Spectracide, Hot Shot, Rid-a-Bug, Bag-a-Bug and No-Pest. The acquisition of these brands expanded our products to include a wide array of value-oriented indoor and outdoor pesticides. In 1994, we acquired assets and licensing rights relating to Cutter from Miles, Inc. In 1995, we acquired assets from Alljack Company and Celex Corporation, including certain licensing rights and certain manufacturing rights of Kmart's opening price point brands.

        On December 17, 2001, we advanced our strategic plan for growth in the consumer lawn and garden category by acquiring leading consumer fertilizer brands Vigoro, Sta-Green and Bandini, as well as acquiring licensing rights to the Best line of fertilizer products. These brands, which were formerly owned by or licensed to U.S. Fertilizer, Inc. (formerly Pursell Industries, Inc.), complement our existing consumer lawn, garden and insect control products.

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        Schultz Company.    On May 9, 2002, one of our wholly-owned subsidiaries merged with Schultz, a manufacturer of horticultural products and specialty items and a distributor of potting soil, soil conditioners and other growing media, whose products are distributed primarily to retail outlets throughout the United States and Canada. The merger was executed to achieve economies of scale and synergistic efficiencies due to the complementary nature of our businesses. As a result of the merger, Schultz became our wholly-owned subsidiary.

        U.S. Fertilizer.    On October 3, 2002, we signed an asset purchase agreement to acquire certain assets from U.S. Fertilizer. The assets acquired included certain inventory, equipment at two of U.S. Fertilizer's facilities and real estate at one of the two facilities. These facilities, located in Orrville, Ohio and Sylacauga, Alabama, previously fulfilled, and are expected to continue to fulfill, over half of our fertilizer manufacturing requirements.

        Also on October 3, 2002, we executed a tolling agreement with U.S. Fertilizer, whereby U.S. Fertilizer will supply us with the remainder of our fertilizer needs. The tolling agreement requires us to be responsible for all raw materials, certain capital expenditures and other related costs for U.S. Fertilizer to manufacture and supply us with fertilizer products. The agreement provides us with early termination rights without penalty upon a breach of the agreement by U.S. Fertilizer or upon our payment of certain amounts as set forth therein.

        WPC Brands.    On December 6, 2002, we acquired WPC Brands, a manufacturer and distributor of various leisure-time consumer products, including a full line of insect repellents, institutional healthcare products and other proprietary and private label products. The acquisition was executed to enhance our insect repellent product lines and to strengthen our presence at major customers. In May 2003, we consummated the sale of all of the non-repellent product lines and associated assets to complete our intended strategy.

        Subsequent Events.    Subsequent to December 31, 2003, we executed several strategic transactions, including the execution of a definitive agreement to acquire a lawn and garden products company, the execution of a licensing, manufacturing and supply agreement with our largest customer, and the execution of an agreement to repurchase certain shares of our outstanding common stock. These transactions are described below and in more detail under "Recent Strategic Transactions" and "Recent Acquisitions and Disposition" under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."

        Definitive Agreement for The Nu-Gro Corporation Acquisition.    In March 2004, we and a newly-created wholly-owned subsidiary of ours entered into a definitive agreement to acquire all of the outstanding common shares of The Nu-Gro Corporation, a lawn and garden products company incorporated under the laws of Ontario, Canada, for an aggregate purchase price of $143.8 million in cash. Shares of Nu-Gro's common stock are publicly traded on the Toronto Stock Exchange. Consummation of the transaction is subject to customary conditions to closing, including regulatory, court and Nu-Gro shareholder approval. We expect to close the transaction during the second quarter of 2004. In connection with the definitive agreement, we also entered into an agreement with Oakwest Corporation Limited and certain related Nu-Gro shareholders who together hold approximately 26% of Nu-Gro's shares, pursuant to which such stockholders have agreed to vote in favor of the transaction. We will account for the transaction as an acquisition, and accordingly, the results of operations of Nu-Gro will be included in our results of operations from the date of acquisition.

        Refinancing.    In connection with the execution of the Nu-Gro definitive agreement and to finance the repurchase of our outstanding Series B Notes, the repurchase of our Class A nonvoting preferred stock and the repayment of accrued dividends thereon, we have obtained a commitment letter from Bank of America, N.A., Banc of America Securities LLC, Citigroup Global Markets, Inc. and Citicorp North America, Inc. for the refinancing of our existing senior credit facility. The commitment letter

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provides for a $510.0 million amended and restated senior secured credit facility consisting of a new seven-year $385.0 million term loan facility and a new six-year $125.0 million revolving credit facility. Principal and interest payments on the new senior credit facility will be payable in consecutive quarterly installments and will bear interest at rates more favorable than our existing senior credit facility, subject to adjustment depending on certain financial ratios. Consummation of the refinancing is subject to negotiation of mutually agreeable definitive agreements, completion of the Nu-Gro acquisition and other customary closing conditions and is expected to occur by the second quarter of 2004. In addition, Bank of America, N.A. has agreed to loan us up to $105.0 million in connection with the acquisition of all of the outstanding shares of Nu-Gro, which loan will be due and payable one business day after funding of the loan. This loan is being used to achieve favorable tax results and is expected to be repaid immediately.

        Customer Agreement.    In February 2004, we and our largest customer executed a licensing, manufacturing and supply agreement, which is subject to approval by our lenders and Board of Directors. Under the agreement, we will license certain of our trademarks and be the exclusive manufacturer and supplier for certain products branded with such trademarks from January 1, 2004, the effective date of the agreement, through December 31, 2008 or such later date as is specified in the agreement. Provided the customer achieves certain required minimum purchase volumes and other conditions during such period, and the manufacturing and supply portion of the agreement is extended for an additional three-year period as specified in the agreement, we will assign the trademarks to the customer not earlier than May 1, 2009, but otherwise within thirty days after the date upon which such required minimum purchase volumes are achieved. The carrying value of such trademarks as of December 31, 2003 was estimated at $16.0 million. If the customer fails to achieve the required minimum purchase volumes or meet other certain conditions, assignment may occur at a later date, if certain conditions are met. In addition, as a result of executing the agreement, we have modified the trademarks' initial amortization period of 40 years and will record amortization in a manner consistent with projected sales activity over five years, commensurate with the term of the agreement.

        Bayer Transactions.    Following the termination of the In-Store Service Agreement, in December 2003, we gave notice to Bayer regarding our exercise of the option to repurchase all outstanding common stock previously issued to Bayer. Bayer disputed our interpretation of the Exchange Agreement and our calculation of the repurchase price. As a result, we and Bayer entered negotiations to determine an agreed upon repurchase price based on equations included in the Exchange Agreement and other factors. We commenced an arbitration proceeding against Bayer to resolve the dispute on January 30, 2004. However, we reached a negotiated settlement of the dispute with Bayer on February 23, 2004, pursuant to which Bayer agreed to deliver all of its shares of our common stock to us in exchange for a cash payment of $1.5 million, cancellation of $22.5 million in remaining payments required to be made in connection with the common stock subscription receivable and forgiveness of interest related to such payments of $0.3 million.

        We recorded treasury stock of $24.4 million, based on the consideration given to Bayer, and reduced the common stock subscription receivable by $22.5 million, the remaining balance on the date of repurchase. We also reversed the common stock repurchase option of $2.6 million as a result of its exercise and recorded a corresponding amount to additional paid-in capital. As a result of this transaction, we and Bayer agreed that the Exchange Agreement and In-Store Service Agreement are fully terminated, with the exception of certain provisions contained therein that expressly survive termination, and that the Supply Agreement shall remain in full force and effect according to its terms. Under the terms of the Supply Agreement, any remaining balance at January 30, 2009 is unconditionally and immediately payable to us by Bayer regardless of whether we purchase any ingredients under the Supply Agreement or not. As of December 31, 2003, the remaining balance of the Supply Agreement was $5.3 million.

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Products

        Under a variety of brand names, we manufacture and market one of the broadest lines of products in our industry, including herbicides and indoor and outdoor insecticides, as well as insect repellents and fertilizers, growing media and soils. Most of our products are value-oriented products, such as value brands and opening price point brands. Our value brands are targeted toward consumers who want products and packaging that are comparable or superior to, and at lower prices than, premium-priced brands, while our opening price point brands are designed for cost conscious consumers who want quality products. The following is a description of each of our major brands and products by segment:

        Lawn and Garden (73% of 2003 net sales).    Our Lawn and Garden segment includes a broad line of brands and a variety of other value and private label products. Following is a description of some of these brands and products:

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Spectracide. The Spectracide product line includes Spectracide Triazicide and Spectracide Terminate and primarily consists of outdoor insect control products and herbicides, but it also includes indoor insect control products, specialty items such as plant disease control and rose care products and regional products, such as fire ant killer and Japanese beetle traps.



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Garden Safe. Launched in 2002, the Garden Safe brand represents a broad line of lawn and garden products for environmentally conscious consumers.



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Schultz. The Schultz brand represents a wide array of lawn and garden, plant care, potting soils and other growing media products. In addition, in 2003, we launched a complete line of outdoor insect control products and herbicides under the Schultz brand.



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Vigoro. The Vigoro brand represents a broad line of lawn and garden fertilizers. The brand was established in 1924 and Vigoro products have been sold exclusively to The Home Depot since 1996.



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Sta-Green. The Sta-Green brand represents a complete line of lawn and garden fertilizers and value-added soils. The brand was established in 1904 and has been primarily sold to Lowe's since 1996 and also to select, typically smaller, lawn and garden distributors.



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Real-Kill. In 1997, we repositioned our Real-Kill brand by re-launching it almost exclusively at The Home Depot as its opening price point brand. It is now also sold at certain other retailers and consists of various indoor and outdoor pesticide and rodenticide products.



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No-Pest. In 1997, we introduced No-Pest exclusively at Lowe's as its opening price point brand. The brand consists of various indoor and outdoor pesticide products.



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Other Value Brands. We also manufacture and market regional value brands and private label products for many other retailers and produce pesticides and other chemicals for other customers.

        Household (25% of 2003 net sales).    We sell a broad range of household insecticides and insect repellents and a number of private label and other products. Below is a description of some of these brands and products.

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Hot Shot. The Hot Shot product line consists of household insecticides, including items such as roach and ant killers, flying insect killers, foggers, wasp and hornet killers, flea control products, and roach and ant baits.

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Cutter. The Cutter product line provides protection from insects, especially mosquitoes, through various aerosol and direct application products, as well as citronella candles, torches and coils. We offer a variety of products, including those marketed especially for use on all members of the family, including children.



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Repel. The Repel brand was obtained through our acquisition of WPC Brands and offers an array of personal insect repellent products marketed primarily to outdoorsmen.

        Contract (2% of 2003 net sales).    The Contract segment includes a variety of compounds and chemicals, such as cleaning solutions and other consumer products.

Customers

        We sell our products through all major retail channels, including mass merchandisers, home improvement centers, hardware, grocery and drug chains, nurseries and garden centers. We are heavily dependent on The Home Depot, Lowe's and Wal*Mart for a substantial portion of our sales. Our net sales to these customers, as a percentage of total net sales, were:

        We manufacture and supply products to hundreds of customers representing more than 70,000 retail stores across the United States and in select locations of Canada, Puerto Rico and the Caribbean. Our strong position in the home improvement center and mass merchandiser channels is a key element to our past and future success.

Seasonality

        Our business is highly seasonal because our products are used primarily in the spring and summer seasons. In 2003, approximately 72% of our net sales occurred in the first and second quarters, resulting in higher net sales and overall operating results during those quarters. In 2002, approximately 70% of our net sales occurred in the first and second quarters while in 2001 approximately 71% of our net sales occurred in the first and second quarters. Our working capital needs, and correspondingly our borrowings, generally peak in the first and second quarters of each year.

Backlog

        Our backlog was $5.1 million as of December 31, 2003 and $2.5 million as of December 31, 2002. However, we do not believe that our backlog is a meaningful indicator of expected sales because of the short lead-time between order entry and shipment. We expect our backlog to be filled within each approaching season, but there can be no assurance that backlog at any point in time will translate into sales in any particular subsequent period.

Sales and Marketing

        We utilize our four customer-focused platform teams to build and maintain strong relationships with our customers which help focus and drive our sales and marketing efforts. In addition, we have one of the largest in-store service forces in the industry. Each representative is responsible for a number of retail outlets and typically visits each store weekly to merchandise shelf space, execute

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in-store programs and train retail associates on product features. This process enables real-time market intelligence gathering and facilitates regionally appropriate, real-time marketing and promotional activities which helps maximize store-level sales and profitability for categories that have a high degree of sensitivity to local weather patterns.

        We also have one of the largest consumer marketing teams in the industry which temporarily grows during our peak selling season. On key selling days of the week, each consumer marketing representative assists consumers in the lawn and garden department at various home improvement center locations. These consumer marketing representatives strive to educate consumers about our products and enable them to make informed buying decisions.

        In most geographies, our critical mass allows our sales and marketing personnel to be dedicated to a specific retailer. Our largest customers favor this approach as it allows a higher degree of knowledge about their entire program and store layout and strengthens in-store relationships and related customer service.

Research and Development

        Our research and development activities focus on applied research using the strength and knowledge of our active ingredient suppliers and strategic active ingredient partners but also include the development of new products, new methods of delivery and identification of shifts in consumer needs and preferences. We spent $2.4 million on research and development activities in 2003, $2.1 million in 2002 and $3.1 million in 2001.

Raw Materials and Suppliers

        The primary components of our products include various specialty chemicals and packaging materials. We obtain raw materials from various suppliers and we currently consider our array of alternative vendors to be adequate. No single vendor is considered to be essential to our operations and we have never experienced a significant interruption of supply. Several of our agreements with suppliers provide for price adjustments and some agreements provide exclusivity rights, subject to certain conditions.

Competition

        Each of our segments operate in highly competitive markets and compete against a number of national and regional brands. We believe the principal factors by which we compete are product quality and performance, value, brand strength and marketing. Our principal national competitors for our Lawn and Garden and Household segments include: The Scotts Company, which markets lawn and garden products under the Scotts®, Ortho®, Roundup®, Miracle-Gro® and Hyponex® brand names; S.C. Johnson & Son, Inc., which markets insecticide and repellent products under the Raid® and OFF!® brand names; Bayer A.G., which markets lawn and garden products under the Bayer Advanced™ brand name; Central Garden & Pet Company, which markets insecticide and garden products under the AMDRO®, IMAGE® and Pennington Seed® brand names; and The Clorox Company, which markets products under the Combat® brand name. In our Contract segment, we compete with a diverse group of companies. Some of our competitors in each segment have substantially greater financial resources and research departments than we do.

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Intellectual Property

        We own, and operate using, a substantial number of trademarks and trade names including the following: Spectracide, Spectracide Triazicide, Spectracide Terminate, Hot Shot, Garden Safe, Schultz, Rid-a-Bug, Bag-a-Bug, Real-Kill, No-Pest, Repel, Vigoro, Sta-Green and Bandini, as well as the licensing rights to the Best line of fertilizer products. We also license certain Cutter trademarks from Bayer A.G. and certain Peters and Peters Professional trademarks from The Scotts Company. These licenses are royalty-free, perpetual and exclusive. See "Recent Strategic Transactions—Customer Agreement" under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," included elsewhere in this Annual Report for more information regarding our intellectual property.

Employees

        As of December 31, 2003, we had approximately 900 full-time employees. Approximately 300 of our employees are covered by a collective bargaining agreement with the Finishers, Maintenance Painters, Industrial and Allied Workers Local Union 980, AFL-CIO which expires in August 2005. We consider our current relationship with our employees, both unionized and non-unionized, to be good.

Environmental and Regulatory Considerations

        Local, state, federal and foreign laws and regulations relating to environmental, health and safety matters affect us in several ways. In the United States, all products containing pesticides must be registered with the United States Environmental Protection Agency (EPA) and, in many cases, similar state agencies before they can be manufactured or sold. The inability to obtain or the cancellation of any registration could have an adverse effect on our business. The severity of the effect would depend on which products were involved, whether another product could be substituted and whether our competitors were similarly affected. We attempt to anticipate regulatory developments and maintain registrations of, and access to, substitute chemicals. We may not always be able to avoid these risks.

        The Food Quality Protection Act establishes a standard for food-use pesticides, which is that a reasonable certainty of no harm will result from the cumulative effect of pesticide exposures. Under the Act, the EPA is evaluating the cumulative effects from dietary and non-dietary exposures to pesticides. The pesticides in our products continue to be evaluated by the EPA as part of this exposure. It is possible that the EPA or a third party active ingredient registrant may decide that a pesticide we use in our products will be limited or made unavailable to us. For example, in 2000, Dow AgroSciences L.L.C., an active ingredient registrant, voluntarily agreed to a withdrawal of virtually all residential uses of Dursban, an active ingredient we used in our lawn and garden products. This had a material effect on our financial position, results of operations and cash flows in 2000. We cannot predict the outcome or the severity of the effect of the EPA's continuing evaluations of active ingredients used in our products.

        In addition to the regulations already described, local, state, federal and foreign agencies regulate the disposal, handling and storage of hazardous substances and hazardous waste, air and water discharges from our facilities and the remediation of contamination. If we do not fully comply with environmental regulations, or if a release of hazardous substances occurs at or from one of our facilities, we may be subject to penalties and/or held liable for the costs of remedying the condition.

        We do not anticipate incurring material capital expenditures for environmental control facilities during 2004. We currently estimate that the costs associated with compliance with environmental, health and safety regulations could total approximately $0.2 million annually for the next several years. The adequacy of our anticipated future expenditures is based on our operating in substantial compliance with applicable environmental and public health laws and regulations and the assumption that there are not significant conditions of potential contamination that are unknown to us. If there is a significant

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change in the facts and circumstances surrounding this assumption, or if we are found not to be in substantial compliance with applicable environmental public health laws and regulations, it could have a material impact on future environmental capital expenditures and other environmental expenses and our consolidated financial position, results of operations or cash flows.

        Certain of our products and packaging materials are subject to regulations administered by the U.S. Food and Drug Administration (FDA). Among other things, the FDA enforces statutory prohibitions against misbranded and adulterated products, establishes ingredients and manufacturing procedures for certain products, establishes standards of identity for certain products, determines the safety of products and establishes labeling standards and requirements. In addition, various states regulate these products by enforcing federal and state standards of identity for selected products, grading products, inspecting production facilities, and imposing their own labeling requirements.

        As of December 31, 2003 and 2002, we believe we were substantially in compliance with applicable environmental and regulatory requirements.

Financial Information about Segments

        For information concerning our operating results by segment, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," and Note 18 of "Notes to Consolidated Financial Statements," included elsewhere in this Annual Report.

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ITEM 2. PROPERTIES.

        Our primary facilities are as follows:

(1)

Approximate square footage increases from 75,000 square feet during non-peak seasons to a maximum of 150,000 square feet during peak seasons.

(2)

Approximate square footage increases from 100,000 square feet during non-peak seasons to a maximum of 260,000 square feet during peak seasons.

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        We believe our current facilities are generally well maintained and provide adequate production and distribution capacity for future operations. Our facilities primarily manufacture five types of product categories: aerosols, liquids, baits, water-soluble fertilizers and granular fertilizers. Our typical manufacturing process consists of four stages: batch, fill, label and pack. We currently operate aerosol, liquid, bait, water-soluble fertilizer and granular fertilizer production lines. Our production lines are flexible and can operate at a variety of filling speeds and produce multiple shipping configurations. We also selectively outsource the manufacturing of certain of our products to contract manufacturers. Periodically, we evaluate the need to reposition our portfolio of products and facilities to meet the changing needs of the markets and customers we serve.

ITEM 3. LEGAL PROCEEDINGS.

        We are involved from time to time in routine legal matters and other claims incidental to our business. When it appears probable in management's judgment that we will incur monetary damages or other costs in connection with such claims and proceedings, and such costs can be reasonably estimated, liabilities are recorded in the consolidated financial statements and charges are recorded to results of operations. We believe that the resolution of such routine matters and other incidental claims, taking into account established reserves and insurance, will not have a material adverse impact on our consolidated financial position, results of operations or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

        There were no matters submitted to a vote of the security holders during the fourth quarter of 2003.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

        Our equity is not currently listed on or with a national securities exchange or national securities association. In addition, we have not historically paid dividends on our common stock. However, while it is presently anticipated that the majority of earnings will be retained and reinvested to support the growth of our business, our Board of Directors continues to evaluate the feasibility of paying dividends in the future. Such payment of future dividends, if any, on common shares will be determined by the Board of Directors in light of conditions then existing, including our earnings, financial condition and capital requirements, restrictions in financing agreements, business conditions and other factors. As of February 27, 2004, there were 74 stockholders of record.

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ITEM 6. SELECTED FINANCIAL DATA.

        The selected historical financial data as of December 31, 2003 and 2002 and for the years ended December 31, 2003, 2002 and 2001 have been derived from our audited consolidated financial statements included elsewhere in this Annual Report. The historical financial data as of December 31, 2001, 2000 and 1999 and for the years ended December 31, 2000 and 1999 have been derived from audited financial statements, which do not appear elsewhere in this Annual Report. When reading this selected historical financial data, it is important that you read along with it the consolidated financial statements and notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," all of which are included elsewhere in this Annual Report.

(1)

Our historical operating results for the year ended December 31, 2002 include the operating results of Schultz from May 9, 2002, the date of merger, and WPC Brands from December 6, 2002, the date of acquisition.

(2)

Cost of goods sold for the year ended December 31, 2003 includes a $1.3 million inventory write-up for inventory recorded at fair value in connection with the WPC Brands acquisition in December 2002. Cost of goods sold for the year ended December 31, 2002 includes a $1.5 million inventory write-up for inventory recorded at fair value in connection with the Schultz merger in May 2002.

(3)

During the year ended December 31, 2001, we recorded an $8.5 million charge, of which $5.6 million was recorded in facilities and organizational rationalization, $2.7 million was recorded in cost of goods sold, and

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$0.2 million was recorded in selling, general and administrative expenses. In addition, selling, general and administrative expenses for the year ended December 31, 2003 includes a $2.4 million noncash charge for additional amortization related to the final valuation of the $24.6 million customer relationship intangible asset acquired in our merger with Schultz. For more information, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Recent Acquisitions and Disposition," included elsewhere in this Annual Report.

(4)

During the year ended December 31, 2000, the EPA and manufacturers of the active ingredient Dursban entered into a voluntary agreement that provided for withdrawal of virtually all residential uses of Dursban in pesticide products. Formulation of Dursban products intended for residential use ceased by December 1, 2000 and formulators discontinued the sale of such products to retailers after February 1, 2001. Retailers were not allowed to sell Dursban products after December 31, 2001. Accordingly, we recorded a charge of $8.0 million in September 2000 for costs associated with this agreement, including customer markdowns, inventory write-offs and related disposal costs. All costs accrued for this agreement, and additional amounts totaling under $0.1 million, were incurred by December 31, 2002.

(5)

During the year ended December 31, 1999, we recorded $31.3 million in fees and expenses associated with the recapitalization. Fees and expenses that were specifically identified as relating to the issuance of debt were capitalized and are being amortized over the remaining term of the debt as interest expense. Fees and expenses relating to the equity transactions of $10.7 million were charged directly to equity. Other transaction fees were allocated between debt and recapitalization transaction fees expense based on our estimate of the related activities.

(6)

During the year ended December 31, 1999, we recorded charges of $8.6 million for change of control bonuses paid to certain members of senior management and $2.4 million for severance arrangements as a result of the termination of our former President and Chief Executive Officer and Senior Vice President, Sales.

(7)

During the year ended December 31, 1999, we recorded litigation charges of $1.5 million to reserve primarily for the expected cost of an adverse judgment on a counterclaim filed by defendants in the case of United Industries Corporation vs. John Allman, Craig Jackman et al. This case was settled in July 1999.

(8)

During the year ended December 31, 1999, we incurred a loss of $2.3 million, net of a $1.4 million income tax benefit, from the early extinguishment of debt.

(9)

During the year ended December 31, 2003, we determined it was more likely than not that we would fully utilize our deferred tax assets and, accordingly, we fully reversed the valuation allowance of $104.1 million resulting in a significant income tax benefit for the year ended December 31, 2003.

(10)

In accordance with current accounting standards, depreciation and amortization for the years ended December 31, 2003 and 2002 does not include amortization of goodwill. Each of the years in the three-year period ended December 31, 2001 includes amortization expense related to goodwill of less th