Energizer 2011 Annual Report Download - page 17

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
2011, 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 2011, this customer accounted for, in the aggregate, approximately 19.5% 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, Schick, Wilkinson Sword, Intuition, Hydro, Quattro, Xtreme 3, Protector, Lady Protector, Silk Effects, ST Slim
Twin, Exacta, Edge, Skintimate, Personna, Capri, Matrix3, M5 Magnum, Bump Fighter, Speed3, Burma-Shave, Mystique,
Banana Boat, Hawaiian Tropic, Avotriplex, Sunsure, Sunsure Protectin & design, UV Protect & design, Binky, Diaper Genie,
Litter Genie, Drop-Ins, The First Sipster, Lil' Gripper, Coolster, Gentle Glide, 360° Protection & design, Get on the Boat,
Habiscus Floral design, HandSaver, Insulator, Insulator Sport, NaturaLatch, Natural Shape, Love Every Moment & design,
Most Like Mother, Twist 'N Click & design, Ortho Pro, Sipster, Sport, VentAire, Ventaire Advanced Crystal Clear, Wet Ones,
and the Energizer Bunny and the Energizer Man character. As a result of the Playtex acquisition, Energizer also owns royalty-
free licenses in perpetuity to the Playtex and Living trademarks in the United States, Canada and many foreign jurisdictions
related to certain feminine hygiene, baby care, gloves and other products, but excluding certain apparel related products.
Energizer's ability to compete effectively in the battery and portable lighting, wet shave, skin care, feminine care and infant
care categories depends, in part, on its ability to maintain the proprietary nature of its technology and manufacturing processes
through a combination of patent and trade secret protection, non-disclosure agreements, licensing, and cross-licensing
agreements. Energizer owns or licenses from third parties a considerable number of patents, patent applications and other
technology which Energizer believes are significant to its business. These relate primarily to battery product and lighting device
improvements, additional battery product features, shaving product improvements and additional features, plastic applicators
for tampons, baby bottles and nipples, disposable liners and plastic holders for the nurser systems, children's drinking cups,
pacifiers, sunscreen formulations, diaper disposal systems, and breast pump products and improvements, and manufacturing
processes.
As of September 30, 2011, Energizer owned (directly or beneficially) approximately 1,400 unexpired United States patents
which have a range of expiration dates from June 2011 to December 2028, and had almost 400 United States patent
applications pending. It routinely prepares additional patent applications for filing in the United States. Energizer also actively
pursues foreign patent protection in a number of foreign countries. As of September 30, 2011, Energizer owned (directly or
beneficially) approximately 2,800 foreign patents and had approximately 1,700 patent applications pending in foreign
countries.
We rely on trademark, trade secret, patent and copyright laws to protect our intellectual property rights. We cannot be sure
that these intellectual property rights will be effectively utilized or, if necessary, successfully asserted. There is a risk that we
will not be able to obtain and perfect our own intellectual property rights, or, where appropriate, license from others intellectual
property rights necessary to support new product introductions.
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