Rayovac 2013 Annual Report Download - page 34

We face risks related to our sales of products obtained from third-party suppliers.
We sell a significant number of products that are manufactured by third party suppliers over which we have
no direct control. While we have implemented processes and procedures to try to ensure that the suppliers we use
are complying with all applicable regulations, there can be no assurances that such suppliers in all instances will
comply with such processes and procedures or otherwise with applicable regulations. Noncompliance could
result in our marketing and distribution of contaminated, defective or dangerous products which could subject us
to liabilities and could result in the imposition by governmental authorities of procedures or penalties that could
restrict or eliminate our ability to purchase products from non-compliant suppliers. Any or all of these effects
could adversely affect our business, financial condition and results of operations.
Class action and derivative action lawsuits and other investigations, regardless of their merits, could have
an adverse effect on our business, financial condition and results of operations.
We and certain of our officers and directors have been named in the past, and, may be named in the future,
as defendants of class action and derivative action lawsuits. In the past, we have also received requests for
information from government authorities. Regardless of their subject matter or merits, class action lawsuits and
other government investigations may result in significant cost to us, which may not be covered by insurance, may
divert the attention of management or may otherwise have an adverse effect on our business, financial condition
and results of operations.
We may be exposed to significant product liability claims which our insurance may not cover and which
could harm our reputation.
In the ordinary course of our business, we may be named as a defendant in lawsuits involving product
liability claims. In any such proceeding, plaintiffs may seek to recover large and sometimes unspecified amounts
of damages and the matters may remain unresolved for several years. Any such matters could have a material
adverse effect on our business, results of operations and financial condition if we are unable to successfully
defend against or settle these matters or if our insurance coverage is insufficient to satisfy any judgments against
us or settlements relating to these matters. Although we have product liability insurance coverage and an excess
umbrella policy, our insurance policies may not provide coverage for certain, or any, claims against us or may
not be sufficient to cover all possible liabilities. Additionally, we do not maintain product recall insurance. We
may not be able to maintain such insurance on acceptable terms, if at all, in the future. Moreover, any adverse
publicity arising from claims made against us, even if the claims were not successful, could adversely affect the
reputation and sales of our products. In particular, product recalls or product liability claims challenging the
safety of our products may result in a decline in sales for a particular product. This could be true even if the
claims themselves are ultimately settled for immaterial amounts. This type of adverse publicity could occur and
product liability claims could be made in the future.
We may incur material capital and other costs due to environmental liabilities.
We are subject to a broad range of federal, state, local, foreign and multi-national laws and regulations
relating to the environment. These include laws and regulations that govern:
• discharges to the air, water and land;
• the handling and disposal of solid and hazardous substances and wastes; and
• remediation of contamination associated with release of hazardous substances at our facilities and at
off-site disposal locations.
Risk of environmental liability is inherent in our business. As a result, material environmental costs may
arise in the future. In particular, we may incur capital and other costs to comply with increasingly stringent
environmental laws and enforcement policies, such as the EU Directives: Restriction of the Use of Hazardous
Substances in Electrical and Electronic Equipment, Waste of Electrical and Electronic Equipment and the
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