Rayovac 2014 Annual Report Download - page 38

be costly to us and could damage the reputation or the value of our brands. If we are required to remove, or we
voluntarily remove our products from the market, our reputation or brands could be tarnished and we may have
large quantities of finished products that could not be sold. Furthermore, failure to timely notify the Consumer
Commission of a potential safety hazard can result in significant fines being assessed against us. Additionally,
laws regulating certain consumer products exist in some states, as well as in other countries in which we sell our
products, and more restrictive laws and regulations may be adopted in the future.
The Food Quality Protection Act (“FQPA”) established 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 FQPA,
the EPA is evaluating the cumulative effects from dietary and non-dietary exposures to pesticides. The pesticides
in certain of our products that are sold through the Home and Garden Business continue to be evaluated by the
EPA as part of this program. 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. 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, the use of certain pesticide products that are sold through our Home and Garden Business may,
among other things, be regulated by various local, state, federal and foreign environmental and public health
agencies. These regulations may require that only certified or professional users apply the product, that users post
notices on properties where products have been or will be applied or that certain ingredients may not be used.
Compliance with such public health regulations could increase our cost of doing business and expose us to
additional requirements with which we may be unable to comply.
Any failure to comply with these laws or regulations, or the terms of applicable environmental permits,
could result in us incurring substantial costs, including fines, penalties and other civil and criminal sanctions or
the prohibition of sales of our pest control products. Environmental law requirements, and the enforcement
thereof, change frequently, have tended to become more stringent over time and could require us to incur
significant expenses.
Most federal, state and local authorities require certification by Underwriters Laboratory, Inc. (“UL”), an
independent, not-for-profit corporation engaged in the testing of products for compliance with certain public
safety standards, or other safety regulation certification prior to marketing electrical appliances. Foreign
jurisdictions also have regulatory authorities overseeing the safety of consumer products. Our products may not
meet the specifications required by these authorities. A determination that any of our products are not in
compliance with these rules and regulations could result in the imposition of fines or an award of damages to
private litigants.
Public perceptions that some of the products we produce and market are not safe could adversely affect us.
On occasion, customers and some current or former employees have alleged that some products failed to
perform up to expectations or have caused damage or injury to individuals or property. Public perception that any
of our products are not safe, whether justified or not, could impair our reputation, damage our brand names and
have a material adverse effect on our business, financial condition and results of operations. In addition, we rely
on certain third party trademarks, brand names and logos which we do not have exclusive use of. Public
perception that any such third party trademarks, band names and logos used by us are not safe, whether justified
or not, could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to negotiate satisfactory terms to continue existing or enter into additional collective
bargaining agreements, we may experience an increased risk of labor disruptions and our results of
operations and financial condition may suffer.
Approximately 15% of our total labor force is covered by collective bargaining agreements. There are 4
collective bargaining agreements that will expire during our fiscal year ending September 30, 2015, which cover
approximately 45% of the labor force under collective bargaining agreements, or approximately 7% of our total
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