Rayovac 2008 Annual Report Download - page 22

Table of Contents
Index to Financial Statements
market or at all. Furthermore, because of the limited market and generally low volume of trading in our Common Stock that could occur, the share price of our
Common Stock could be more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the
markets perception of our business, and announcements made by us, our competitors or parties with whom we have business relationships. Investors may also
determine to exit our Common Stock as a result of the delisting of our Common Stock, which could depress the share price. With respect to the Company, in
some cases, we may be subject to additional compliance requirements under applicable state laws in the issuance of our securities. The lack of liquidity in our
Common Stock may also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange for any financing we may
need in the future. In addition, we may experience other adverse effects, including, without limitation, the loss of confidence in us by current and prospective
suppliers, customers, employees and others with whom we have or may seek to initiate business relationships.
We participate in very competitive markets and we may not be able to compete successfully.
The markets in which we participate are very competitive. In the consumer battery market, our primary competitors are Duracell (a brand of Procter &
Gamble), Energizer and Panasonic (a brand of Matsushita). In the electric shaving and grooming and electric personal care product markets, our primary
competitors are Braun (a brand of Procter & Gamble), Norelco (a brand of Philips), and Vidal Sassoon and Revlon (brands of Helen of Troy). In the pet supplies
market, our primary competitors are Mars, Hartz and Central Garden & Pet. In our Home and Garden Business our principal national competitors are the Scotts
Company, Central Garden & Pet S.C. Johnson. In each of our markets, we also face competition from numerous other companies.
We and our competitors compete for consumer acceptance and limited shelf space based upon brand name recognition, perceived quality, price,
performance, product packaging and design innovation, as well as creative marketing, promotion and distribution strategies. Our ability to compete in these
consumer product markets may be adversely affected by a number of factors, including, but not limited to, the following:
• We compete against many well established companies that may have substantially greater financial and other resources, including personnel and
research and development, and greater overall market share than we do.
• In some key product lines, our competitors may have lower production costs and higher profit margins than we do, which may enable them to
compete more aggressively in offering retail discounts, rebates and other promotional incentives.
• Product improvements or effective advertising campaigns by competitors may weaken consumer demand for our products.
• Consumer purchasing behavior may shift to distribution channels where we do not have a strong presence.
• Consumer preferences may change to lower margin products or products other than those we market.
If our product offerings are unable to compete successfully, our sales, results of operations and financial condition could be materially and adversely
affected.
The shutdown of the growing media portion of our Home and Garden Business could impact our sales of other products to customers of our growing
products.
In the first quarter of our Fiscal 2009, our Board of Directors committed to the shutdown of the growing products portion of the Home and Garden
Business. There can be no assurance that this shutdown can be accomplished in a manner that does not negatively impact the operations of the customers of that
business. Customers to whom we sell our other products in addition to our growing products could choose to react to our shutdown of the growing products
portion of the Home and Garden Business by decreasing or ceasing their purchases of other products from us. If such customers were to take such steps, our
sales, results of operations and financial condition could be materially and adversely affected.
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008