Rayovac 2009 Annual Report Download - page 30

Table of Contents
Index to Financial Statements
from enhanced scrutiny by the FDA or other governmental authorities of pet food and pet treats and related animal food products. 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.
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 20% of our total labor force is employed under collective bargaining agreements. Three of these agreements, which cover
approximately 68% of the labor force under collective bargaining agreements, or approximately 14% of our total labor force, are scheduled to expire during
our fiscal year ending September 30, 2010. While we currently expect to negotiate continuations to the terms of these agreements, there can be no
assurances that we will be able to obtain terms that are satisfactory to us or otherwise to reach agreement at all with the applicable parties. In addition, in the
course of our business, we may also become subject to additional collective bargaining agreements. These agreements may be on terms that are less
favorable than those under our current collective bargaining agreements. Increased exposure to collective bargaining agreements, whether on terms more or
less favorable than existing collective bargaining agreements, could adversely affect the operation of our business, including through increased labor
expenses. While we intend to comply with all collective bargaining agreements to which the Company is subject, there can be no assurances that we will be
able to do so and any noncompliance could subject the Company to disruptions in its operations and materially and adversely affect its results of operations
and financial condition.
Significant changes in actual investment return on pension assets, discount rates, and other factors could affect our results of operations, equity, and
pension contributions in future periods.
Our results of operations may be positively or negatively affected by the amount of income or expense we record for our defined benefit pension
plans. GAAP requires that we calculate income or expense for the plans using actuarial valuations. These valuations reflect assumptions about financial
market and other economic conditions, which may change based on changes in key economic indicators. The most significant year−end assumptions we
used to estimate pension income or expense are the discount rate and the expected long−term rate of return on plans assets. In addition, we are required to
make an annual measurement of plan assets and liabilities, which may result in a significant change to equity. Although pension expense and pension
funding contributions are not directly related, key economic factors that affect pension expense would also likely affect the amount of cash we would
contribute to pension plans as required under the Employee Retirement Income Security Act.
Risks Related to Spectrum Brands, Inc.’s Common Stock
Risks of trading in an over the counter market.
Spectrum Brands, Inc.’s common stock currently trades in the over−the−counter market. Securities traded in the over−the−counter market generally
have significantly less liquidity than securities traded on a national securities exchange, through factors such as a reduction in the number of investors that
will consider investing in the securities, the number of market makers in the securities, reduction in securities analyst and news media coverage and lower
market prices than might otherwise be obtained. As a result, holders of shares of the common stock may find it difficult to resell their shares at prices quoted
in the market or at all. Furthermore, because of the limited market and generally low volume of trading in the common stock that could occur, the share
price of the common stock could be more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results,
changes in the market’s perception of our business, and announcements made by us, our competitors or parties with whom we have business relationships.
In some cases, we may be subject to additional compliance requirements under applicable state laws in the issuance of securities. The lack
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