Energizer 2011 Annual Report Download - page 23

and/or estimated cash flows related to specific intangible assets, as well as potential changes in market valuations for similar
assets and market discount rates may result in an impairment charge, which could have an adverse impact on our operating
results and financial position.
Loss of reputation of our leading brands could have an adverse effect on our business.
We depend on the continuing reputation and success of our brands, particularly the Energizer, Eveready, Schick, Wilkinson
Sword, Edge, Skintimate, Playtex, Diaper Genie, Wet Ones, Banana Boat and Hawaiian Tropic brands. The success of these
brands can suffer if our marketing plans or new product offerings do not have the desired impact on our brand's image or ability
to attract consumers. Further our operating results could be adversely affected if one of our leading brands suffers damage to its
reputation due to real or perceived quality issues.
Loss of any of our principal customers could significantly decrease our sales and profitability.
Wal-Mart, together with its subsidiaries, is our largest customer, accounting for approximately 19.5% of net sales in fiscal
2011. Generally, sales to Wal-Mart and our other top customers are made pursuant to purchase orders and we do not have
supply agreements or guarantees of minimum purchases from them. As a result, these customers may cancel their purchase
orders or reschedule or decrease their level of purchases from us at any time. The loss or a substantial decrease in the volume of
purchases by Wal-Mart or any of our other top customers would harm our sales and profitability. Additionally, increasing
retailer customer concentration could result in reduced sales outlets for our products, greater negotiating pressures and pricing
requirements on Energizer.
Energizer's manufacturing facilities or supply channels may be subject to disruption from events beyond our control.
Operations of our manufacturing and packaging facilities worldwide may be subject to disruption for a variety of reasons,
including availability of raw materials, work stoppages, industrial accidents, disruptions in logistics, loss or impairment of key
manufacturing sites, product quality or safety issues, licensing requirements and other regulatory issues and acts of war,
terrorism, pandemics, fire, earthquake, flooding or other natural disasters. The supply of our raw materials may be similarly
disrupted. There is also a possibility that third party manufacturers, which produce a significant portion of certain of our
products, could discontinue production with little or no advance notice, or experience financial problems or problems with
product quality or timeliness of product delivery, resulting in manufacturing delays or disruptions, regulatory sanctions, product
liability claims or consumer complaints. If a major disruption were to occur, it could result in delays in shipments of products
to customers or suspension of operations.
A failure of a key information technology system could adversely impact our ability to conduct business.
We rely extensively on information technology systems, including some which are managed by third-party service
providers, in order to conduct business. These systems include, but are not limited to, programs and processes relating to
communicating within Energizer and with other parties, ordering and managing materials from suppliers, converting materials
to finished products, shipping products to customers, processing transactions, summarizing and reporting results of operations,
and complying with regulatory, legal or tax requirements. The information technology systems could be damaged or cease to
function properly due to the poor performance or failure of third-party service providers, catastrophic events, power outages,
security breaches, network outages, failed upgrades or other similar events. If our business continuity plans do not effectively
resolve such issues on a timely basis, we may suffer interruptions in conducting our business which may adversely impact our
operating results.
Energizer's business involves the potential for product liability and other claims against us, which could affect our results of
operations and financial condition.
We face exposure to claims arising out of alleged defects in our products, including for property damage, bodily injury or
other adverse effects. We cannot assure you that our product liability insurance covers all types of claims, particularly claims
that do not involve personal injury or property damage, that such claims will not exceed the amount of insurance coverage, or
that we will be able to maintain such insurance on acceptable terms, if at all. In addition to the risk of monetary judgments not
covered by insurance, product liability claims could result in negative publicity that could harm our or our products' reputation.
Additionally, we do not maintain product recall insurance. As a result, product recalls or product liability claims could have a
material adverse effect on our business, results of operations and financial condition.
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