Rayovac 2009 Annual Report Download - page 29

Table of Contents
Index to Financial Statements
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 U.S.
Environmental Protection Agency as part of this program. It is possible that the U.S. Environmental Protection Agency 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 U.S. Environmental Protection Agency’s continuing evaluations of active ingredients used in our products.
In addition, the use of certain pesticide and fertilizer products that are sold through our global pet supplies business and through the 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.
We face risks related to our sales of products obtained from third−party suppliers.
We sell a 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 food and health regulations, there can be no assurances
that such suppliers in all instances will comply with such processes and procedures or otherwise with applicable food and health regulations.
Noncompliance could result in our marketing and distribution of contaminated or defective products which could subject the Company 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 the Company’s business, financial condition and results of operations.
Our business could suffer from the effects of the H1N1 virus or other wide−spread viruses.
The effects of the H1N1 virus, commonly known as “Swine Flu,” or other wide−spread viruses, could adversely affect our business. An outbreak of
such a virus in a given location could severely interfere with and substantially disrupt the manufacture and/or shipment of our products and could have a
material adverse effect on our operations. A prolonged recurrence of the virus could also adversely affect the various economies into which we ship our
products and cause an immediate and prolonged drop in consumer demand for our products in those economies. Any of these events could adversely affect
our financial condition and results of operations. The general impact, if any, of the virus on our operations, our results of operations and financial condition
is highly speculative, cannot be accurately predicted or quantified, and would depend on numerous factors, including the rate of contagion, the regions of
the world most affected, the effectiveness of treatment for the infected population and the rates of mortality and morbidity.
Public perceptions that some of the products we produce and market are not safe could adversely affect us.
We manufacture and market a number of complex chemical products bearing our brands relating to the Home and Garden Business, such as
herbicides and pesticides. 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.
In 2007, certain pet food manufactured in China, which was tainted with a mildly toxic chemical known as melamine and sold in the U.S., was linked
to numerous companion animal fatalities and triggered a widespread recall of pet food by many major pet food suppliers. Sales of our pet food and pet treat
products may be adversely affected because of general consumer distrust of pet food suppliers who manufacture pet food or pet treats in China or distribute
pet food or pet treats manufactured in China or negative public perceptions resulting
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