Rayovac 2009 Annual Report Download - page 19

Table of Contents
Index to Financial Statements RISK FACTORS
Any of the following factors could materially and adversely affect our business, financial condition and results of operations and the risks described
below are not the only risks that we may face. Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also
materially and adversely affect our business, financial condition or results of operations.
Risks Related To Our Emergence From Bankruptcy
Our actual financial results may vary significantly from the projections filed with the Bankruptcy Court.
In connection with the Chapter 11 reorganization, the Debtors were required to prepare projected financial information to demonstrate to the
Bankruptcy Court administering the Chapter 11 reorganization the feasibility of the Plan and the ability of the Debtors to continue operations upon
emergence from bankruptcy. As part of the disclosure statement approved by the Bankruptcy Court and as otherwise furnished to the SEC, the projections
reflected numerous assumptions concerning anticipated future performance and prevailing and anticipated market and economic conditions that were and
continue to be beyond our and the other Debtors’ control and that may not materialize. Projections are inherently subject to uncertainties and to a wide
variety of significant business, economic and competitive risks. Our actual results may vary from those contemplated by the projections and the variations
may be material. Neither these projections nor any form of the disclosure statement should be considered or relied upon in connection with the purchase of
Spectrum Brands, Inc.’s securities.
Because our consolidated financial statements are required to reflect fresh−start reporting adjustments to be made upon emergence from
bankruptcy, financial information in our financial statements prepared after August 30, 2009 will not be comparable to our financial information
from prior periods.
All conditions required for the adoption of fresh−start reporting were met upon emergence from Chapter 11 of the Bankruptcy Code on the Effective
Date. However, in light of the proximity of that date to our accounting period close immediately following the Effective Date, which was August 30, 2009,
we elected to adopt a convenience date of August 30, 2009 for recording fresh−start reporting. We adopted fresh−start reporting in accordance with the
Accounting Standards Codification (“ASC”) Topic 852: “Reorganizations,” formerly American Institute of Certified Public Accountants Statement of
Position No. 90−7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code,” pursuant to which our reorganization value, which is
intended to reflect the fair value of the entity before considering liabilities and approximate the amount a willing buyer would pay for the assets of the entity
immediately after the Reorganization, will be allocated to the fair value of assets in conformity with ASC Topic 805: “Business Combinations,” formerly
Statement of Financial Accounting Standards No. 141, Business Combinations, using the purchase method of accounting for business combinations. We
will state liabilities, other than deferred taxes, at a present value of amounts expected to be paid. The amount remaining after allocation of the reorganization
value to the fair value of identified tangible and intangible assets will be reflected as goodwill, which is subject to periodic evaluation for impairment. In
addition, under fresh−start reporting the accumulated deficit will be eliminated. Thus, our future Statements of Financial Position and results of operations
will not be comparable in many respects to statements of financial position and consolidated statements of operations data for periods prior to the adoption
of fresh−start reporting. The lack of comparable historical information may discourage investors from purchasing Spectrum Brands, Inc.’s securities.
Additionally, the financial information included in this Annual Report on Form 10−K may not be indicative of future financial information.
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