Energizer 2010 Annual Report Download - page 19

ENERGIZER HOLDINGS, INC.
(Dollars in millions, except per share and percentage data)
9
Sources and Availability of Raw Materials
The principal raw materials used by Energizer - electrolytic manganese dioxide, zinc, silver,
nickel, acetylene black, graphite, steel cans, nylon, brass wire, separator paper, and potassium
hydroxide, for batteries, and steel, zinc, various plastic resins, synthetic rubber resins, soap
based lubricants and various packaging materials, for wet shave products, and certain naturally
derived fibers, resin-based plastics and certain chemicals for the Playtex product lines, - are
sourced on a regional or global basis. Although the prices of zinc, nickel, electrolytic
manganese dioxide, and resins, in particular, have fluctuated over time, Energizer believes that
adequate supplies of the raw materials required for its operations are available at the present
time. Energizer, of course, cannot predict the future availability or prices of such materials.
These raw materials are generally available from a number of different sources, and the prices
of those raw materials are susceptible to currency fluctuations and price fluctuations due to
transportation, government regulations, price controls, economic climate, or other unforeseen
circumstances. In the past, Energizer has not experienced any significant interruption in
availability of raw materials.
We believe we have extensive experience in purchasing raw materials in the commodity
markets. From time to time, management has taken positions in various ingredients to assure
supply and to protect margins on anticipated sales volume.
Sales and Distribution
Energizer’s products are marketed primarily through a direct sales force, but also through
exclusive and non-exclusive distributors and wholesalers. In the U.S. and Canada, Household
Products and Personal Care each has a dedicated commercial organization reflecting the scale
and importance of these businesses. Outside the U.S. and Canada, the commercial teams
market our full portfolio of product offerings. Energizer distributes its products to consumers
through numerous retail locations worldwide, including mass merchandisers and warehouse
clubs, food, drug and convenience stores, electronics specialty stores and department stores,
hardware and automotive centers and military stores.
Although a large percentage of Energizer’s sales are attributable to a relatively small number of
retail customers, in fiscal 2010, only Wal-Mart Stores, Inc. and its subsidiaries, as a group,
accounted for more than ten percent of Energizer’s annual sales. For fiscal year 2010, this
customer accounted for, in the aggregate, approximately 20.1% of Energizer’s sales. Because
of the short period between order and shipment date (generally less than one month) for most
of our orders, the dollar amount of current backlog is not material and is not considered to be a
reliable indicator of future sales volume.
Patents, Technology and Trademarks
Energizer owns a number of U.S., Canadian and foreign trademarks, which Energizer
considers of substantial importance and which are used individually or in conjunction with other
Energizer trademarks. These include Eveready, Energizer, Energizer Max, Energizer UltraPlus,
Energizer Ultimate, Schick, Wilkinson Sword, Intuition, Hydro, Quattro, Xtreme 3, Protector,
Lady Protector, Silk Effects, ST Slim Twin, Exacta, Edge, Skintimate, Banana Boat, Hawaiian
Tropic, Avotriplex, Sunsure, Sunsure Protectin & design, Binky, Diaper Genie, Drop-Ins, The
First Sipster, Gentle Glide, Get on the Boat, Habiscus Floral design, HandSaver, Insulator,
Insulator Sport, NaturaLatch, Natural Shape, Love Every Moment & design, Most Like Mother,
Ortho Pro, Sipster, Sport, VentAire, Ventaire Advanced Crystal Clear, and Wet Ones, the