Rayovac 2009 Annual Report Download - page 27

Table of Contents
Index to Financial Statements
• the terms and conditions upon which we purchase products from our suppliers;
• the financial condition of our suppliers;
• the ability to import outsourced products; or
• our suppliers’ ability to manufacture and deliver outsourced products on a timely basis.
If our relationship with one of our key suppliers is adversely affected, we may not be able to quickly or effectively replace such supplier and may not
be able to retrieve tooling, molds or other specialized production equipment or processes used by such supplier in the manufacture of our products.
In addition, we manufacture the majority of our foil cutting systems for our shaving product lines, using specially designed machines and proprietary
cutting technology, at our Portage, Wisconsin facility. Damage to this facility, or prolonged interruption in the operations of this facility for repairs, as a
result of labor difficulties, or for other reasons, would have a material adverse effect on our ability to manufacture and sell our foil shaving products which
would in turn harm 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.
Spectrum Brands and certain of its 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, Spectrum Brands has 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 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 defendants 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. 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.
We may incur material capital and other costs due to environmental liabilities.
Because of the nature of our operations, our facilities 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
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